Abnormal Earnings Valuation Model
What is the 'Abnormal Earnings Valuation Model' The abnormal earnings valuation model is a method for determining a company's worth that is based on book value and earnings. Also known as the residual income model, it looks at whether management's decisions cause a company to perform better or worse than anticipated. The model says that investors should...
Accelerated Cost Recovery System (ACRS)
What is 'Accelerated Cost Recovery System - ACRS' A system of depreciation introduced by the Economic Recovery Tax Act of 1981. ACRS depreciation is based on recovery periods instead of useful life. These periods were predetermined by the IRS. Explaining 'Accelerated Cost Recovery System - ACRS' The modified accelerated cost recovery system (MACRS) replaced...
Accelerated Bookbuild
What is an 'Accelerated Bookbuild' An accelerated bookbuild is a form of offering in the equity capital markets. It involves offering shares in a short time period, with little to no marketing. The bookbuild of the offering is done vey quickly in one or two days. Underwriters may sometimes guarantee a minimum price and proceeds to the...
Active Management
DefinitionActive management refers to a portfolio management strategy where the manager makes specific investments with the goal of outperforming an investment benchmark index. In passive management, investors expect a return that closely replicates the investment weighting and returns of a benchmark index and will often invest in an index fund. Active Management Active management is a strategy for managing...
Absorption Rate
What is the absorption rate The real estate absorption rate is the rate at which properties are sold in a specific market. It is calculated by dividing the number of properties sold in a given period by the total number of properties available for sale. It can be used to measure the health of a housing market and to predict...
Absorbed Cost
What is an absorbed cost and how does it impact a business's bottom line An absorbed cost is an overhead cost that has been fully allocated to a particular product or activity. This term is typically used in accounting and financial planning. An absorbed cost may also be referred to as a sunk cost. The costs associated with setting up...
Impression
What is 'Impression' A metric used to quantify the display of an advertisement on a web page. Impressions are used in banner advertising, which often pays on a per impression basis. Frequently, these are measured by Cost Per Mille (CPM), where mille refers to 1,000 impressions. Explaining 'Impression' For example, a banner ad might...
Lease
DefinitionA lease is a contractual arrangement calling for the to pay the lessor for use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial or business equipment is also leased. Lease What is a 'Lease ' A lease is a contract outlining the terms under which one party agrees to rent...
Real Estate Owned (REO)
What is 'Real Estate Owned - REO' Real estate owned, or REO, is the name given to foreclosed-upon real estate, such as detached houses, condominiums, townhomes and land, in a bank's portfolio. Such properties end up in bank portfolios after unsuccessful sales at foreclosure auctions. A bank takes ownership of a foreclosed property when no bidder offers...
Real Estate Settlement Procedures Act (RESPA)
What is 'Real Estate Settlement Procedures Act - RESPA' This act was designed to protect potential homeowners and enable them to become more intelligent consumers. RESPA requires that lenders provide greater amounts of information to prospective borrowers at certain points in the loan settlement process. It also prohibits the various parties involved from paying kickbacks to each...