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Present value |
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Present valueThe value today of a stream of payments and/or receipts over time in the future and/or the past, converted to the present using an interest rate. If Xt is the amount in period t and r the interest rate, then present value at time t=0 is V = St (Xt)/(1+r)t.Present valueThe amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future. To determine the present value, each future cash flow is multiplied by a present value factor. For example, if the opportunity cost of funds is 10%, the present value of $100 to be received in one year is $100 x [1/(1 + 0.10)] = $91.Present value Similar MatchesAdjusted present value (APV)Adjusted present value (APV)The net present value analysis of an asset if financed solely by equity (present value of unlevered cash flows), plus the present value of any financing decisions (levered cash flows). In other words, the various tax shields provided by the deductibility of interest and the benefits of other investment tax credits are calculated separately. This analysis is often used for highly leveraged transactions such as a leveraged buyout. Net present value (NPV)Net present value (NPV)The present value of the expected future cash flows minus the cost. Net present value of growth opportunitiesNet present value of growth opportunitiesA model valuing a firm in which net present value of new investment opportunities is explicitly examined. Proportional representationProportional representationA method of stockholder voting that allows minority shareholders and groups of small shareholders to have a better chance of getting representation on a board of directors than under statutory voting. Company representative (tied agent)Company representative (tied agent)A financial services sales rep, authorised to give financial advice on life assurance, pensions and unit trusts, but only allowed to recommend products from his/her employer. Unlike, IFAs, therefore, tied agents cannot be assumed to give impartial advice.Under the Financial Services Act 1986 all financial advisers must tell prospective clients whether they are tied agents or independent, so that the client knows what kind of advice he is getting.Tied agents are regulated by the Financial Services Authority (FSA). Further SuggestionsAIMR Performance Presentation Standards Implementation CommitteeNet adjusted present value net present value Registered representative Present State Present Value Index (PVI) Present value of growth opportunities Registered Representative Net present value Present value factor Net present value rule Appointed representative |
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