chap 6 - discounted cash flow valuation Flashcards
1
Q
annuity
A
a level stream of cash flows for a ficed period of time
2
Q
annuity due
A
an annuity for which the cash flows occur at the beginning of the period
3
Q
perpetuity
A
an annuity in which the cash flows continue forever
4
Q
consol
A
a type of perpetuity
5
Q
stated interest rate
A
the interest rate expressed n terms of the interest payment made each period. also known as the quoted interest rate
6
Q
effective annual rate (EAR)
A
the interest rate expressed as if it were compounded once per year
7
Q
annual percentage rate (APR)
A
the interest rate charged per period multiplied by the number of periods per year
