Discount factor


 

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Discount factor

Present value of $1 received at a stated future date.



Discount factor

Similar Matches

Dividend discount model

Dividend discount model

A way of valuing a share based on the net present value of the dividends that you expect to receive in the future.The simplest version of the model assumes that the company's dividend rate remains constant. The 'fair' price of the share is the dividend (in pennies per share) divided by the required rate of return. So if you want 10% a year from your shares, the value of a company paying a 7p dividend is 70p. If you think a return of 8% is satisfactory, the value of the same share is 87.5p.A more complex model assumes that the dividends of the company grow at a consistent rate. The fair price to pay is the next dividend divided by the required rate of return minus the rate at which dividends are expected to grow. So if the 7p dividend is expected to grow at 5% per year, an investor requiring an 12% return would value the shares at (7p x 1.05) divided by (0.12 - 0.05)= (7.35p) divided by (0.07)= 105p


Discount securities

Discount securities

Non-interest-bearing money market instruments that are issued at a discount and redeemed at maturity for full face value, e.g., US Treasury bills.


Dividend Discount Return

Dividend Discount Return

The rate of return which equates the present value of future expected dividends with the current market price of a security.


Bank discount basis

Bank discount basis

A convention used for quoting bids and offers for Treasury bills in terms of annualized yield, based on a 360-day year.


Original issue discount debt (OID debt)

Original issue discount debt (OID debt)

Debt that is initially offered at a price below par.


Further Suggestions

Accrued market discount
Discount payment
Documented discount notes
Accretion (of a discount)
Discount
Deep discount bond
Discounted cash flow (DCF)
Forward discount
Discount Arbitrage
Discount period
Volume discount
Discount period
Discount window
Forward discount
Discounted basis
Unamortized bond discount
Discount yield
Dividend Discount Model (DDM)
Accrued discount
Risk adjusted discount rate
deep discount
bond discount
Discount rate
discount
Discount Interest


 
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