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Investments glossary

Degree of Financial Leverage – DFL Definition

A degree of financial leverage (DFL) is a leverage ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. The degree of financial leverage (DFL) measures the percentage change in EPS for a unit change in operating income, also known as earnings before interest and taxes (EBIT).

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Investments glossary

Adjusted Present Value (APV) Definition

The adjusted present value is the net present value (NPV) of a project or company if financed solely by equity plus the present value (PV) of any financing benefits, which are the additional effects of debt. By taking into account financing benefits, APV includes tax shields such as those provided by deductible interest.

Categories
Investments glossary

Degree of Financial Leverage – DFL Definition

A degree of financial leverage (DFL) is a leverage ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. The degree of financial leverage (DFL) measures the percentage change in EPS for a unit change in operating income, also known as earnings before interest and taxes (EBIT).

Categories
Investments glossary

Adjusted Present Value (APV) Definition

The adjusted present value is the net present value (NPV) of a project or company if financed solely by equity plus the present value (PV) of any financing benefits, which are the additional effects of debt. By taking into account financing benefits, APV includes tax shields such as those provided by deductible interest.

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Investments glossary

Open Listing

In real estate, an open listing has two meanings. Open listing can refer to a property for sale whose owner is using multiple real estate agents in order to find as many potential buyers as possible. The agent who brings in the winning buyer for the property collects the commission.

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Investments glossary

General Business Tax Credit

The general business tax credit is the total value of all the individual credits to be applied against income on a tax return. This credit can be carried forward for a number of years in most cases and can also be carried back in some cases.

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Investments glossary

Warrant

Warrants are a derivative that give the right, but not the obligation, to buy or sell a security—most commonly an equity—at a certain price before expiration. The price at which the underlying security can be bought or sold is referred to as the exercise price or strike price. An American warrant can be exercised at any time on or before the expiration date, while European warrants can only be exercised on the expiration date. Warrants that give the right to buy a security are known as call warrants; those that give the right to sell a security are known as put warrants. read more

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Investments glossary

Wage Push Inflation

Wage push inflation is an overall rise in the cost of goods that results from a rise in wages. To maintain corporate profits after an increase in wages, employers must increase the prices they charge for the goods and services they provide. The overall increased cost of goods and services has a circular effect on the wage increase; eventually, as goods and services in the market overall increase, higher wages will be needed to compensate for the increased prices of consumer goods.

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Investments glossary

Proprietary Trading

Proprietary trading refers to a financial firm or commercial bank that invests for direct market gain rather than earning commission dollars by trading on behalf of clients. Also known as prop trading, this type of trading activity occurs when a financial firm chooses to profit from market activities rather than thin-margin commissions obtained through client trading activity. Proprietary trading may involve the trading of stocks, bonds, commodities, currencies or other instruments.

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Investments glossary

Kuala Lumpur Stock Exchange (KLS)

The Kuala Lumpur Stock Exchange (KLSE) was the precursor exchange to the Bursa Malaysia Exchange. Its main index is the Kuala Lumpur Composite Index (KLCI), composed of the top 30 companies on the Bursa Malaysia Exchange.