Time value of money 


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Time value of moneyThe idea that a dollar today is worth more than a dollar in the future, because the dollar received today can earn interest up until the time the future dollar is received.Time value of money Similar MatchesBreak up valueBreak up valueThe total value of all a company's separate operations if sold separately.The terms is used most often when contrasted with the market capitalisation of the company as a whole, and the implication is that if the sum of the parts is greater than the whole, the company should be split up to release the extra value to shareholders. Net book valueNet book valueThe current book value of an asset or liability; that is, its original book value net of any accounting adjustments such as depreciation. Conversion parity or valueConversion parity or valueApplies mainly to convertible securities. Common stock price at which a convertible bond can become exchangeable for common shares of equal value; value of a convertible bond based solely on the market value of the underlying equity. Par value + conversion ratio. See bond value, investment value, parity. Intrinsic valueIntrinsic valueAn expression used in options and warrants trading which indicates the difference between the exercise price of the option/warrant and current price of the underlying instrument (shares, an index, commodity etc). As such it shows how much the options or warrants would be worth if exercised immediately.A call option/warrant has intrinsic value if the exercise price is below the share price, because it means that the holder of the option can buy shares in, e.g. Company X for 70p when they are trading at 82p. In such a situation it is said to be ' in the money' and has intrinsic value of 12p. If the share price is lower than the exercise price, the call option has no intrinsic value and the option is said to be out of the money.For put options and warrants, which give the holder a right to sell the shares, the situation is the other way round. The option has intrinsic value if the price of the underlying share is lower than the option price, because it means that the option holder can sell shares at 82p when they are trading at 70p (for example). Again, the intrinsic value would be 12p. Conversely, a put option is out of the money if the share price is higher than the option exercise price.For value investors, intrinsic value has a slightly different meaning. It is an estimate of the true worth of a company based on an analysis of its current and projected future earnings and how that relates to its share price. Breakup valueBreakup valueSee: Private market value. Further SuggestionsStraight valueValue investing Present value Net salvage value Price value of a basis point (PVBP) Stated value No par value stock Long market value Value quota Investment value time value Standardized value Normal value Par value Slicing up the value chain Conversion value Exercise value surrender value Bond value Trade weight value of the dollar Loan toValue Ratio Intrinsic value of an option Book value per share Future value Value dating 
