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Details

Finance
Finance Theories and Techniques
7
Business
Post-Graduate
02/15/2010

Additional Business Flashcards

 


 

Cards

Term
Put-Call Parity
Definition

C + X/ (1 + rf)T = S0 + P


C = cost of call

X = face value of bond

S0= cost of stock

P = cost of put

Term
EVA
Definition

Method #1

EVA = NOPLAT - Capital Charge

where capital charge = IC x WACC


Method #2

EVA = (ROIC - WACC) x IC

 

Term
EVA Momentum
Definition

EVA Momentum =

(EVAt - EVAt-1) / Salest-1

Term
EVA Margin
Definition

EVA / Sales

The percentage of sales after all operating expenses and capital charges

Term
EVA Proftiable Growth
Definition

[Sales growth rate] x [EVA margin]

 

Term
MVA
Definition

Market Value Added:

the spread between the company's market value and the capital employed on its balance sheet

Term

Invested Capital

(operating approach)

Definition
IC = net operating working capital + net PPE + capitalized operating leases + other operating assets - operating intangibles - other operating liabilities - cumulative adjustment for amortization of R&D
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