Sentences with phrase «of future cash flows»

A company's worth, at its essence, is the present value of its future cash flows discounted, net of debt.

The higher the price an investor pays for a given stream of future cash flows, the lower the long - term return an investor can expect.

The value of any asset is the sum of its future cash flows discounted to present value.

That's because some producers use an accounting method that requires them to take charges when estimates of future cash flow fall below the cost to acquire land and drill wells.

Market value of a company is the a sum of all future cash flows (or expectations of such).

Answer: discount rates are meant to measure the risk and uncertainty of future cash flows.

As the discount rate increases, the present value of those future cash flows decline, decreasing the value of the investment.

If a company is seen as cutting back on its growth or is less profitable — either through higher debt expenses or less revenue — the estimated amount of future cash flows will drop.

A chart of future cash flows for a cash financed solar installation as presented in Aurora.

First, since the present value of future cash flows depends on interest rates, the cost of the liability is sensitive to interest rate changes.

Is this money simply going in to the owner's pocket in exchange for some percentage of future cash flow?

Capital assets, such as stocks, bonds and real estate, provide an ongoing source of value that can be measured using the present value of future cash flows technique.

Included are discussion areas of future cash flows, taxes, insurance, college and other areas of personal finance.

Net lease contracts reduce the risk of a property investor, because they reduce significantly the uncertainty of future cash flows, especially if they are long term.

The price that a bond sells for in the market today is the sum of all future cash flows, discounted in value because they are not available today.

If future inflation rises, the value of future cash flow declines.

Either system can work but they have to be applied fairly, estimating the value / amount of future cash flows.

«Unlike a stock where you're not sure of future cash flows of the company, with bonds you know exactly what they're going to be,» Rick Ferri, an advisor at Portfolio Solutions, told Money.

Investors and even the Fed seem oblivious to the risks because they assume that recent earnings can be taken as a sufficient statistic for decades and decades and decades of future cash flows.

Also, while government support via tax credits and other benefits has been strong it could subside which would reduce the level of future cash flows.

If market participants believe that there is higher inflation on the horizon, interest rates and bond yields will rise (and prices will decrease) to compensate for the loss of the purchasing power of future cash flows.

As Warren Buffet has stated many times, the value of any stock equals the discounted value of the future cash flows available to equity holders.

If CAPE is high due to high future EPS growth expectations or is high due to mechanical imprecision in earnings measurement because past earnings are artificially depressed, and hence less indicative of future cash flows, then a high CAPE ratio is fully compatible with high expected future returns.

A few years later, Shiller and Campbell (1988) showed that variations in dividend yields do not forecast the growth rates of future cash flows, but do forecast future market returns.

More specifically, an interest rate swap looks a lot like a combination of FRAs and involves an agreement between counterparties to exchange sets of future cash flows.

As our definition suggests, intrinsic value is an estimate rather than a precise figure, and it is additionally an estimate that must be changed if interest rates move or forecasts of future cash flows are revised.

Amounts available at different dates in the future are discounted back to a present value, and summed to get the present value of a series of future cash flows.

This is quite unlike the behavior or some traditional assets, such as stocks, which have very well defined value characteristics (dividends and price appreciation, arising out of expectations of future cash flows generated by a firm).

This is a guarantee of future cash flow.

One of those laws is that a stock is a claim on a very long - term stream of future cash flows, and very little of the value is attributable to the first year or two.

Asset prices often decline as the immediate response to a rise in interest rates because investors perceive higher interest rates will reduce the present value of future cash flows from investments.

In the insurance context an actuarial reserve is the present value of the future cash flows of an insurance policy and the total liability of the insurer is the sum of the actuarial reserves for every individual policy.

Since stocks are a claim on decades and decades of future cash flows, that 10 % increment would only justify a 10 % increase in stock prices if the tax reduction can be expected to survive every future U.S. Administration and Congress.

Such growth seems a good prospect, based not only on the long - term track records of the companies in various TAM portfolios but, more importantly, assuming that the independent appraisals represent reasonable estimates of future cash flows for existing properties, then future cash flows should be relatively large compared to the current discount market prices for the relevant common stocks.

(A present value is a single number that expresses a flow of current and future payments in terms of an equivalent lump sum paid today; the present value of future cash flows depends on the discount rate that is used to translate them into current dollars.)

Trizec, which had owned 25 % of the building, bought out Whitehall as office leases were coming up for renewal and the level of future cash flows was uncertain.

Anyone calculating intrinsic value necessarily comes up with a highly subjective figure that will change both as estimates of future cash flows are revised and as interest rates move.

Typically, when analyzing a property, investors assume an exit capitalization rate that is higher than the entry cap rate by 0.5 - 1 percentage points to account for the uncertainty of future cash flows expected to be received by the property under consideration over the holding period.

3 High Quality Dividend Growth Stocks For The Next 20 Years by Sure Dividend The value of any investment is the sum of its future cash flows discounted to present value.

The Folly Of Discounted Cash Flow Analysis by Sure Dividend The value of any asset is the sum of its future cash flows discounted to present value.

The intrinsic value approach relies on estimating value based on a combination of the net present value of the future cash flow stream of a business and any excess assets not used to generate those cash flows.

He pays particular attention to discounted cash flow — an estimate of future cash flow that factors in risk and length of time invested.

She thinks a company's worth is its net present value of future cash flows.

Over the years, I've emphasized what I call the Iron Law of Valuation: the every security is a claim on an expected stream of future cash flows, and given that expected stream of future cash flows, the current price of the security moves opposite to the expected future return on that security.