| book value | An accounting measure describing the net worth of common equity according to a firm's balance sheet.
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| constant-growth DDM | A form of the dividend discount model that assumes dividends will grow at a constant rate.
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| dividend discount model (DDM) | A formula stating that the intrinsic value of a firm is the present value of all expected future dividends.
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| dividend payout ratio | Percentage of earnings paid out as dividends.
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| earnings management | The practice of using flexibility in accounting rules to improve the apparent profitability of the firm.
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| earnings retention ratio | Plowback ratio.
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| intrinsic value | (1) of a firm: The present value of a firm's expected future net cash flows discounted by the required rate of return. (2) of an option: Stock price minus exercise price, or the profit that could be attained by immediate exercise of an in-the-money option.
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| liquidation value | Net amount that could be realized by selling the assets of a firm after paying the debt.
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| market capitalization rate | The market-consensus estimate of the appropriate discount rate for a firm's cash flows.
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| plowback ratio | The proportion of the firm's earnings that is reinvested in the business (and not paid out as dividends). The plowback ratio equals 1 minus the dividend payout ratio.
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| present value of growth opportunities | Net present value of a firm's future investments.
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| price–earnings multiple | The ratio of a stock's price to its earnings per share. Also referred to as the P/E multiple.
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| replacement cost | Cost to replace a firm's assets. "Reproduction" cost.
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| Tobin's q | Ratio of market value of the firm to replacement cost.
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