Expected profit

In general, the hope of achieving an excess of income over expenses from an investment. – The expected total return on a financial instrument at maturity. – In the case of equities, usually the share price calculated as the sum of expected future dividend payments discounted at a risk-free interest rate and the risk premium charged to investors for holding the shares. – See discounting, disclosures, incorrect, present value, earnings potential, zero dividend, sentiment. – Cf. ECB Monthly Bulletin of March 2004, pp. 37 ff., ECB Monthly Bulletin of September 2007, pp. 47 ff. (empirically detectable synchronization between corporate profits and economic growth; overviews), ECB Monthly Bulletin of April 2008, pp. 70 ff. (profits as a determinant of investment).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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