Open AccessRisk-Adjustment and Reinvestment Rates: Net Terminal Value
Author(s) -
Keith Wm. Fairchild
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v3i3.6513
Subject(s) - terminal value , terminal (telecommunication) , net present value , cash flow , value (mathematics) , investment (military) , present value , variety (cybernetics) , economics , discounted cash flow , net (polyhedron) , net worth , econometrics , actuarial science , monetary economics , computer science , microeconomics , mathematics , finance , statistics , telecommunications , debt , geometry , production (economics) , politics , political science , law
The traditional discounted cash flow techniques of capital investment analysis suffer a variety of problems due to implicit reinvestment assumptions, as well as a general inability to appropriately adjust for differing risk profiles. Net Terminal Value is introduced as a means by which these limitations may be overcome.