The rate of return on an equity interest, taking into account financing costs and income tax implications of the investor.
The annual percentage rate (APR) represents the annualized cost of borrowing or the annual rate of return on an investment, incorporating interest rate and all associated fees.
The Cap Rate, or Capitalization Rate, is a fundamental metric used in real estate to determine the rate of return on an investment property based on the income it is expected to generate.
In finance and accounting, 'capital' refers to various forms of assets, interests, or financial contributions that play a critical role in the functioning of an entity or the production process, enhancing productivity and enabling operations.
The effective interest rate is a key financial metric calculated from the purchase price of a debt instrument. It provides a more precise measure of the actual yield on a bond compared to the face interest rate or coupon rate.
The Equity Yield Rate measures the rate of return on the equity portion of an investment, accounting for periodic cash flow and proceeds from resale, but excluding income taxes.
A Guaranteed Income Contract (GIC) is a financial instrument typically utilized within corporate profit-sharing or pension plans wherein an insurance company guarantees a specific rate of return on invested capital over the contract's duration.
The time span from the acquisition of an investment to its final disposition. It encompasses all relevant investment contributions, cash flows, and resale proceeds, providing the best measure of the rate of return from the investment over its entire duration.
An annual measure for evaluating the efficiency of an investment, typically represented as a percentage of the original investment value.
The required rate of return (RRR) represents the minimum return an organization deems necessary to justify an investment, expressed as a percentage.
The risk premium represents the difference between the expected rate of return on an investment and the risk-free rate of return (such as those on government bonds) over the same period. It accounts for the compensation investors require to bear the additional risk associated with investment.
The rate of return on an investment that has no risk. The return on US and UK Treasury bills is often regarded as a very close approximation to this rate. The risk-free rate is an important concept in the Capital Asset Pricing Model (CAPM).
