When evaluating terminal value, should I use the perpetuity growth model or the exit approach?

July 9, 2024 No Comments

A: In discounted cash flow (DCF) analysis, neither the perpetuity growth model nor the exit multiple approach is likely to render a perfectly accurate estimate of terminal value. The choice of which method of calculating terminal value to use depends partly on whether an investor

When is a call option considered to be “in the money”?

June 30, 2024 No Comments

A: A call option gives the buyer or holder the right, but not the obligation, to buy the underlying security at a predetermined strike price on or before the expiration date. “In the money” describes the moneyness of an option. Moneyness describes the relationship of

When is a call option considered to be “in the money”?

July 7, 2024 No Comments

When is accrual accounting more useful than cash accounting?

June 30, 2024 No Comments

A: The accrual accounting method is more useful than the cash accounting method when a person or company is trying to understand the performance of a business over a specified time period. Under the accrual accounting method, all revenue and expenses are matched together. All

When is accrual accounting more useful than cash accounting?

July 7, 2024 No Comments

When is accrual accounting more useful than cash accounting?

July 9, 2024 No Comments

When is an expense ratio considered high and when is it considered low?

June 30, 2024 No Comments

A: A number of factors determine when an expense ratio is relatively high or low, but a good, low expense ratio is generally considered to be around 0.5-0.75% for an actively managed portfolio, while an expense ratio greater than 1.5% is considered on the high

When is an expense ratio considered high and when is it considered low?

July 7, 2024 No Comments

When is an expense ratio considered high and when is it considered low?

July 9, 2024 No Comments

When is earnings season?

July 9, 2024 No Comments

A: Earnings season is the period of time during which a large number of publicly traded companies release their quarterly earning reports. In general, each earnings season begins one or two weeks after the last month of each quarter (December, March, June and September). In

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