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Return Of Capital
{{Unreferenced, date=February 2007 Return of capital (ROC) refers to principal Principal may refer to: Title or rank * Principal (academia) The principal is the chief executive and the chief academic officer of a university A university ( la, universitas, 'a whole') is an educational institution, institution of higher ... payments back to "capital owners" (shareholders, partners, unitholders) that exceed the growth (net income/taxable income) of a business or investment. It should not be confused with Rate of Return (ROR), which measures a gain or loss on an investment. Basically, it is a return of some or all of the initial investment, which reduces the basis on that investment. The ROC effectively shrinks the firm's equity in the same way that all distributions do. It is a transfer of value from the company to the owner. In an efficient market, the stock's price will fall by an amount equal to the distribution. Most public companies pay out only a percentage of their inc ...
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Principal (finance)
Debt is an obligation that requires one party, the debtor A debtor or debitor is a legal entity (legal person) that owes a debt Debt is an obligation that requires one party, the debtor A debtor or debitor is a legal entity (legal person) that owes a debt Debt is an obligation that ..., to pay money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The main functions of money are distinguished as: a ... or other agreed-upon value to another party, the creditor A creditor or lender is a party 300px, '' Hip, Hip, Hurrah!'' (1888) by Peder Severin Krøyer, a painting portraying an artists' party in 19th century Denmark A party is a gathering of people who have been invited by a host A host is .... Debt is a deferred payment, or series of payments, which differentiates it from an immediate purc ...
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Royalty Trust
A royalty trust is a type of corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ..., mostly in the United States or Canada, usually involved in oil and gas A fossil fuel is a hydrocarbon-containing material formed underground from the remains of dead plants and animals that humans extract and combustion, burn to release energy for use. The main fossil fuels are coal, petroleum and natural gas, w ... production or mining Mining is the extraction of valuable mineral In geology and mineralogy, a mineral or mineral species is, broadly speaking, a solid chemical compound with a fairly well-defined chemical composition and a specific crystal structure that occu .... However, unlike most corporations, its profits are not taxed at the corporate level provided a certa ...
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Cash Out Refinancing
Cash out refinancing (in the case of real property) occurs when a loan is taken out on property already owned, and the loan amount is above and beyond the cost of transaction, payoff of existing liens, and related expenses. Definition Strictly speaking, all refinancing of debt is "cash-out," when funds retrieved are utilized for anything other than repaying an existing loan. In the case of common usage of the term, cash out refinancing refers to when equity is liquidated from a property above and beyond sum of the payoff of existing loans held in lien on the property, loan fees, costs associated with the loan, taxes, insurance, tax reserves, insurance reserves, and in the past any other non-lien debt held in the name of the owner being paid by loan proceeds. Example of cash out refinancing A homeowner who owes $80,000 on a home valued at $200,000 has $120,000 in equity. This equity can be liquidated with a cash-out refinance loan providing the loan is larger than $80,000. The to ...
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Time Value Of Money
The time value of money is the widely accepted conjecture that there is greater benefit to receiving a sum of money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The main functions of money are distinguished as: a ... now rather than an identical sum later. It may be seen as an implication of the later-developed concept of time preference In economics, time preference (or time discounting, delay discounting, temporal discounting, long-term orientation) is the current relative valuation placed on receiving a good or some cash In economics Economics () is the social sci .... The time Time is the continued sequence of existence and event (philosophy), events that occurs in an apparently irreversible process, irreversible succession from the past, through the present, into the future. It is a component quantity of ...
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Recovery Of Capital Doctrine
In United States tax law the recovery of capital doctrine protects a portion of investment receipts from being taxed, namely the amount that was initially invested. This is because the investor is receiving his or her own money which is being returned to him or her. For example, if a person purchased stock in a company totalling $10,000 and then sold it a few years later for $15,000, only $5,000 would be eligible for taxation. The initial $10,000 is protected under the recovery of capital doctrine. References

United States tax law {{Law-stub ...
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Return On Capital
Return on capital (ROC), or return on invested capital (ROIC), is a ratio used in finance Finance is a term for the management, creation, and study of money In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, in the left corn ..., valuation and accounting Accounting or Accountancy is the measurement ' Measurement is the number, numerical quantification (science), quantification of the variable and attribute (research), attributes of an object or event, which can be used to compare with other ob ..., as a measure of the profitability and value-creating potential of companies relative to the amount of capital invested by shareholders and other debtholders.Fernandes, Nuno. Finance for Executives: A Practical Guide for Managers. NPV Publishing, 2014, p. 36. It indicates how effective a company is at turning capital into profits. The ratio is calculated by dividing th ...
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