INTEREST RATE SWAP Definition

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INTEREST RATE SWAP (IRS) is a contractual arrangement between two counter-parties who agree to exchange interest payments on a defined principal amount for a fixed period of time.

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DISCOUNTED EARNINGS determines the value of a business based upon the present value of projected future earnings, discounted by the required rate of return (capitalization rate). Usually, the question is how well earnings are projected.

ALTERNATIVE MINIMUM TAX (AMT) is an alternative tax which includes certain tax preference items that are added back into adjusted gross income. If higher than the regular tax, then the regular tax plus the amount by which AMT exceeds the regular tax is paid.

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