positive rate of time preference - Consumers value present consumption more than future consumption, Interest rate - Interest per year as a percentage of the amount saved or borrowed, expected rate of return on capital - The expected annual earnings divided by capital’s purchase price, Intellectual property - An intangible asset created by human knowledge and ideas, demand for loanable funds - The negative relationship between the market interest rate and the quantity of loanable funds demanded, other things constant, Loanable funds market - The market in which savers (suppliers of loanable funds) and borrowers (demanders of loanable funds) come together to determine the market interest rate and the quantity of loanable funds exchanged, Prime rate - The interest rate lenders charge their most trustworthy business borrowers, collateral - An asset pledged by the borrower that can be sold to pay off the loan in the event the borrower defaults, Present value - The value today of income to be received in the future, discounting - Converting future dollar amounts into present value, annuity - A given sum of money received each year for a specified number of years, Initial public offering - The initial sale of corporate stock to the public, Corporate stock - Certificate reflecting part ownership of a corporation, dividends - After-tax corporate profit paid to stockholders rather than retained by the firm and reinvested, Retained earnings - After-tax corporate profit reinvested in the firm rather than paid to stockholders as dividends, bond - Certificate reflecting a firm’s promise to pay the lender periodic interest and to repay the borrowed sum of money on the designated maturity date, crowdfunding - Raising money from many people through an online platform,

Chapter 13, Finance!

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