What Is Absolute Priority? Absolute priority, also known as “liquidation preference,” is a rule governing the order of payment among creditors and shareholders in the event of a corporate liquidation. The absolute priority rule is used in corporate bankruptcies to decide the portion of payment that will be made to each participant. Debts to creditors
What Is the Absolute Rate? The absolute rate, also known as the absolute swap yield, is the total yield earned by both parties to an interest rate swap. It is calculated as the sum of the fixed and variable components of the interest rate swap. For example, if an interest rate swap has a fixed
What Is the Absolute Return Index? The term absolute return index refers to a stock index designed to measure absolute returns on investments in hedge funds. Hedge funds are considered alternative investments that use pooled funds to earn returns for their investors. The index was created to compare the performance of an individual hedge fund against
What Is an Absolute Title? An absolute title to a property (also known as a perfect title) is free of any encumbrances or deficiencies. An absolute title gives an unequivocal right of ownership to the owner and cannot be disputed or challenged by anyone else. This is opposed to titles with liens, attachments, or judgments
What Is Absolute Value? Absolute value, also known as an intrinsic value, refers to a business valuation method that uses discounted cash flow (DCF) analysis to determine a company’s financial worth. The absolute value method differs from the relative value models that examine what a company is worth compared to its competitors. Absolute value models
What Is Absorption Costing? Absorption costing, sometimes called “full costing,” is a managerial accounting method for capturing all costs associated with manufacturing a particular product. All direct and indirect costs, such as direct materials, direct labor, rent, and insurance, are accounted for when using this method. Under generally accepted accounting principles (GAAP), U.S. companies may
What Is Absorption Rate? Absorption rate most commonly refers to a metric used in the real estate market to evaluate the rate at which available homes are sold in a specific market during a given time period. It is calculated by dividing the number of homes sold in the allotted time period by the total
What Is an A-B Split? An A-B split test is a way to compare two versions of a marketing campaign, mobile application, website, or other measurable media to determine which performs better. In an A-B split test, users are divided randomly into a control group and a variation group. These two sets of users are
What Is an Abstract Of Title? Abstract of title is a record of the title history of a property or other significant asset, including transfers, liens, and legal actions that are connected to the property. This document is crucial for purchasers or investors of a property as a summary of a title’s status to ensure
What Is an A-B Trust? An A-B trust is a joint trust created by a married couple for the purpose of minimizing estate taxes. It is formed with each spouse placing assets in the trust and naming as the final beneficiary any suitable person except the other spouse. The trust gets its name from the
