# Accounts

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Date Submitted: 11/19/2012 04:10 AM

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Account Receivable

A balance due from a customer.

Accounting Beta Method

A method of estimating a project's beta by running a regression of the company's return on assets against the average return on assets for a large sample of firms.

Accounting Profit

A firm's net income as reported on its income statement.

Accruals

Continually recurring short-term liabilities, especially accrued wages and accrued taxes.

Acquiring Company

A company that seeks to acquire another firm.

Actual Realized Rate of Return,-ks

The rate of return on a common stock actually received by stockholders.-ks may be greater or less that ^ks and/or ks.

Interest that is calculated and added to funds received to determine the face amount of an installment loan.

Funds that a firm must raise externally through borrowing or by selling new common or preferred stock.

Preferred stocks whose dividends are tied to the rate on Treasury securities.

After-tax Cost of Debt, kd(1-T)

The relevant cost of new debt, taking into account the tax deductibility of interest; used to calculate the WACC.

Agency Problem

A potential conflict of interest between the agent (manager) and (1) the outside stockholders or (2) the creditors (debtholders).

Aging Schedule

A report showing how long accounts receivable have been outstanding.

Amortization Schedule

A table showing precisely how a loan will be repaid. It gives the required payment on each payment date and a breakdown of the payment, showing how much is interest and how much is repayment of principal.

Amortized Loan

A loan that is repaid in equal payments over its life.

Annual Compounding

The arithmetic process of determining the final value of a cash flow or series of cash flows when interest is added once a year

Annual Percentage Rate (APR)

The periodic rate X...