Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 4 terms
The annual return a particular plan needs in order to arrive, computed from the target amount, the date, what is already saved and what can be added each month.
A consequence rather than a choice, and quite separate from the discount rate a valuation calls a required return. Where it exceeds what your capacity for loss permits, the quantities that can move are the contribution, the target and the date — never the allocation.
The annual rate used to convert future cash flows into present value, reflecting time and risk.
Your required return. Change it by two points and the valuation moves by a third.
Valuing a share as the present value of all the dividends it will pay.
The Gordon growth version is next year’s dividend ÷ (required return − growth). Very sensitive to the gap between those two rates.
Weighted average cost of capital — the blend of the cost of debt and the cost of equity, weighted by how much of each the company uses.
The formal discount rate for a DCF, which most investors reasonably simplify into a required return by business type. Running the model at three plausible rates says more than deriving one precisely.