Month: May 2020

The mortgage interest deduction is a common itemized deduction that allows homeowners to deduct the interest they pay on any loan used to build, purchase, or make improvements upon their residence, from taxable income. The mortgage interest deduction can also be taken on loans for second homes and vacation residences with certain limitations. The amount of deductible mortgage interest is reported each year by the mortgage company on Form 1098. This deduction is offered as an incentive for homeowners. read more

The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm’s cost of equity represents the compensation the market demands in exchange for owning the asset and bearing the risk of ownership. The traditional formula for the cost of equity is the dividend capitalization model and the capital asset pricing model (CAPM).

The mortgage interest deduction is a common itemized deduction that allows homeowners to deduct the interest they pay on any loan used to build, purchase, or make improvements upon their residence, from taxable income. The mortgage interest deduction can also be taken on loans for second homes and vacation residences with certain limitations. The amount of deductible mortgage interest is reported each year by the mortgage company on Form 1098. This deduction is offered as an incentive for homeowners. read more

The War Damage Insurance Corporation was a government financial protection arm created during World War II to provide coverage for war risks not covered by existing policies. The U.S. government provivded this coverage, to compensate American nationals for property damage caused by acts of war.

Regression is a statistical method used in finance, investing, and other disciplines that attempts to determine the strength and character of the relationship between one dependent variable (usually denoted by Y) and a series of other variables (known as independent variables).

An accountant is a professional who performs accounting functions such as audits or financial statement analysis. This is also known as account analysis. Accountants can either be employed with an accounting firm or a large company with an internal accounting department, or they can set up an individual practice. Accountants are given certifications by national professional associations after meeting state-specific requirements, although non-qualified persons can still work under other accountants or independently. read more

Notional value is a term often used to value the underlying asset in a derivatives trade. It can be the total value of a position, how much value a position controls, or an agreed-upon amount in a contract. This term is used when describing derivative contracts in the options, futures, and currency markets.

The volatility ratio is a technical measure used to identify price patterns and breakouts. In technical analysis it uses true range to gain an understanding of how a security’s price is moving on the current day in comparison to its past volatility.

A waiver of notice is a document individuals sign which legally waives their rights to receive formal notices regarding certain probate issues. For example, let’s assume a family patriarch named Charley passes away, and that his estate is meant to be distributed among his three children: Michael, Sally, and Melissa, who are his sole heirs. Under normal circumstances, the probate court must issue a public notice regarding proceedings pertaining to the probate of Charley’s will. However, if Michael, Sally, and Melissa–all of whom have deeply vested interests in Charley’s assets, consent to waivers of notice, an appointed administrator or executor may attend in their places. By sending such representatives in their stead, courts can accelerate the the probate process, thus benefitting Charley’s heirs by ultimately allowing them to receive their inheritances faster, as a result. read more

A common size income statement is an income statement in which each line item is expressed as a percentage of the value of revenue or sales. It is used for vertical analysis, in which each line item in a financial statement is represented as a percentage of a base figure within the statement.