This category covers all kinds of topics in finance including corporate finance and financial management. The topics on financial institution and stock exchange will also be included.
A loan and a line of credit are two different types of debt instruments. Both these products offer a certain type of borrowing facilities to borrowers. Depending on the type and the borrower’s needs, a loan and a line of credit may offer different benefits and drawbacks. Let us discuss what are the key differences …
Annual percentage rate (APR) and annual percentage yield (APY) are both types of interest rates. Both these terms look similar but are significantly different. APR is a simple interest rate whereas APY is the yield that considers the compounding effect of interest. This results in significantly different uses for both these rates. Let us discuss …
APR Vs APY: What’s the Difference? (With Examples) Read More »
Portfolio rebalancing is the periodic adjustment of asset allocation in an investment portfolio. It can be performed for individual and corporate investors. The main purpose of rebalancing is to maintain the risk exposure of the portfolio within the defined objectives of the investor. Let us discuss what is portfolio rebalancing, how it works, and what …
The compound annual growth rate and the internal rate of return are both commonly used types of rates of return. Individual investors and businesses can use these two metrics to compare different investment options. Both of these metrics offer different perspectives and can be used in different situations. Let us discuss what are CAGR and …
Internal growth rate (IGR) is the measure of the growth of a business without external financing. It is driven by the net income and retained earnings of a business. Let us discuss what is IGR and how to calculate it. What is Internal Growth Rate? Internal growth rate (IGR) is the level of growth achieved …
What is Internal Growth Rate and How to Calculate It? Read More »
Sustainable growth rate (SGR) and internal growth rate (IGR) are closely linked business growth concepts. SGR is the growth rate that a business can sustain without external financing. While IGR is the growth that can be achieved with internal resources. Let us discuss what are sustainable growth and internal growth rates and the key differences …
Sustainable Growth Rate Vs Internal Growth Rate – What are the Differences? Read More »
The constant growth formula uses the dividend growth rate and the required rate of return to calculate the intrinsic value of a stock. Let us discuss what is the constant growth model and how we can use it to calculate the stock price. What is Gordon’s Constant Growth Model? The Gordon Growth Model (GGM) or …
How to Determine the Stock Price with Constant Growth Model? Read More »
Assets under management or AUM are the funds managed by an individual or an institute. These are the total assets managed by the fund managers for their investors. AUM is the indicator of the size and performance of a fund like a mutual fund or hedge fund. Investors and fund managers use this metric as …
Short selling or shorting is a trading strategy that refers to selling borrowed stocks or other investment instruments. Traders look for quick gains when they anticipate a price fall in any of the asset’s prices. It requires a margin account and trades are placed using leverage offered by the brokers. Let us discuss what is …
Short-selling or shorting is a risky trading strategy. It requires careful planning and execution to make it work. That’s why it is recommended for experienced traders only and experts do not suggest it for novice traders. Let us discuss what is the short-selling mechanism, its risks, and its rewards. Short Selling – Mechanism Short selling …
