DISCOUNTED EARNINGS Definition

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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.

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PREREFUNDING is the the issuing of new securities to refund an outstanding security. Proceeds from the new securities are used to buy instruments, usually U.S. Treasuries, to be held in escrow for the purpose of retiring bonds or preferred stock.

JOINT STOCK COMPANY is a company that has some features of a corporation and some features of a partnership. This type of company has access to the liquidity and financial reserves of stock markets as a corporation, however, as in a partnership; the stockholders are liable for company debts and have additional restrictions of a partnership.

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