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B C
D E
F G
H-I J-K-L
M N O
P Q-R S
T U-V-W-X-Y-Z |
Par value
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The par value is the stated face
value of a stock or bond.
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Partnership
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A partnership is a business entity which is created
when two or more individuals and/or entities join together to conduct a
business, with the goal of making a profit. The business can be
a partnership of individuals, corporations, trusts, other
partnerships, or a combination of these.
In order to form a partnership, an agreement is drawn up which
outlines the terms of the partnership. The terms would include
required contributions of capital by each partner, rules governing the
management of the partnership, and the method of allocating profits or
losses among partners.
A partnership has unlimited liability. The partners are jointly liable for all debts and other
liabilities of the business. If the business is sued, all the business
and personal
assets of the partners are at risk. An exception to this is a
Limited Partnership.
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Pay yourself
first
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Use
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10% of your gross income
for making extra payments on
your debt, or |
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10% of your gross income for saving or investing outside of
a tax-deductible Individual Retirement Arrangement (IRA), or |
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15% of your gross income for making contributions to
your IRA. |
The reason for using 15% for making IRA contributions is to
include your tax savings in your contributions. If you earn $60,000 per year and contribute $6,000 (10%
of your earnings), if your marginal tax rate is 30% you will get $1,800 in
tax savings. When you contribute the $1,800 to your IRA it will generate
another $540 of tax savings. When you contribute the $540, it will generate
another $162 of tax savings, etc., etc......
In order to have the same after-tax money as when you are
using 10% of your gross income to pay down your debt or save outside of an
IRA, you will have to contribute about 15% of your earnings to your IRA. You can then do what you want with any tax refund.
See our Free
in 30! page.
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Penny stock
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A stock which sells for less than a
dollar, and is considered to be speculative.
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Pension Plans
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See:
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Portfolio
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A group of investments owned. |
Preferred shares
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Preferred shares are a class
of corporate capital stock which normally holds priority over common shares in
dividend payments, and in distribution of the corporate
assets in a liquidation.
See also capital stock.
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Prepaid expenses
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A prepaid expense occurs when
services or supplies are purchased but not used by the end of the
accounting period, such as property taxes (if your fiscal year-end is
not the same as the year-end for property taxes) and insurance.
For example, the term for insurance is
normally one year or longer. Thus, if the term is one year, but
the insurance payment date is not at the end of the fiscal year, then a portion of the insurance cost applies to the next fiscal year.
At the end of the year this portion will show on the balance sheet as
a prepaid expense.
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Present value
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The value today of a payment or
series of payments to be made (or received) in the
future. To determine the present value, an
interest rate (discount rate) is used. For
example, the present value of a payment of $1,000
to be made in one year, using a 5% discount rate
would be $952.38 ($1,000 / 1.05). In other
words, the present value is the amount you need to
invest today, at the specified interest rate, to
make the specified payment or series of payments
in the future.
See our Present
Value/Future Value calculator.
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Price/book ratio (P/B)
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Market value per share divided
by book value per share
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Price/cashflow
ratio (P/CF)
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Market value per share divided
by annual cashflow per share |
Price/earnings ratio
(P/E)
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Market value per share divided
by annual net income per share
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Price/free cashflow
(P/FCF)
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Market value per share divided
by annual free cashflow per share
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Price/sales ratio (P/S)
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Market value per share divided
by annual sales per share, or total market cap
divided by total annual sales.
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Prime rate
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The prime rate is the interest rate charged by
financial institutions to their best customers. See also overnight rate.
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Principal protected notes (PPNs)
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See structured
products. |
Private corporation
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Shares of a private
corporation are not publicly traded on a stock
exchange. See
also public
corporation.
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Pro rata
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In proportion to. A pro rata
refund for a partially fulfilled contract would be
for the proportion of the contract which is
unfulfilled.
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Promissory note
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A written promise to repay an
unsecured loan. |
Proprietorship
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An
unincorporated business owned by one person. For tax purposes,
the net income of the proprietorship is reported as self employment
income on the owner's personal income tax return. |
Prospectus
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Legal document prepared for
potential investors which describes all facets of
the securities or property being offered for
investment. This should always be
scrutinized carefully by potential investors.
If there is no prospectus provided for a potential
investment, you should seek professional
advice.
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Public corporation
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Shares of a public
corporation are listed on a stock
exchange and can be purchased by the
general public. See also private
corporation.
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Put
option
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See option.
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Revised: February 20, 2009
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