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Normalizing method

Definition:

Making a change in the income account equivalent to the tax savings realized through the use of different depreciation methods for shareholder and income tax purposes, thus washing out the benefits of the tax savings reported as final net income to shareholders.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Price value of a basis point (PVBP)

Also called the dollar value of a basis point; a measure of the change in the price of a bond if the required yield changes by one basis point.

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