Nominal annual rate and Stakeholder: Difference between pages

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imported>Doug Williamson
(Link with Rate of return page.)
 
imported>Doug Williamson
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The rate of return - or cost of borrowing - ''per annum'' named or quoted in a market, under the quoting convention for the given market.
''Corporate social responsibility - company law - corporate governance.''


Stakeholders are all the people and bodies who have a legitimate interest in an organisation's activities, including shareholders but also covering a much wider group of interest holders.


Market quotations are usually given per annum, and for this reason the term ''nominal rate'' is often used interchangeably with nominal annual rate.
One important group of stakeholders are lenders - also known as debt investors.




<span style="color:#4B0082">'''Example 1'''</span>
The term Stakeholders may be defined very broadly, and the breadth of its definition has been increasing over time.


GBP overnight interest payable at the periodic rate of 0.014% per day, would conventionally be quoted on a nominal annual basis as:
In the business context, stakeholders are normally considered to include, as a minimum, shareholders, lenders and employees.
 
= number of times the period fits into a conventional year x periodic rate
 
= 365 x 0.014%
 
= 5.11%.
 
 
The nominal annual rate is sometimes also known as a 'quoted rate', 'market rate, or 'nominal rate'.
 
The nominal annual rate should not be confused with the effective annual rate, which is usually different.
 
 
'''Notation'''
 
Nominal annual interest rates and yields are often denoted by 'R'.
 
This distinguishes them from periodic interest rates and yields (r), and from effective annual rates (EAR).
 
 
'''Conversion formulae'''
 
Using the notation above:
 
R = nominal annual interest rate or yield
 
r = periodic interest rate or yield
 
n = number of times the period fits into a conventional year
 
 
'''''To convert from a periodic rate (r) to a nominal annual rate (R)'''''
 
R = r x n
 
 
'''''To convert from a nominal annual rate (R) to a periodic rate (r)'''''
 
r = R / n
 
 
<span style="color:#4B0082">'''Example 2'''</span>
 
GBP interest is quoted at a nominal annual rate of 5.11% for daily interest calculation.
 
Calculate the periodic rate per day.
 
 
r = R / n
 
= 5.11% / 365
 
= 0.014%
 
 
 
<span style="color:#4B0082">'''Example 3'''</span>
 
The periodic rate for GBP interest is 0.01% per day.
 
Calculate the nominal annual rate.
 
 
R = r x 365
 
= 0.01% x 365
 
= 3.65%




== See also ==
== See also ==
* [[Continuously compounded rate of return]]
* [[Capital]]
* [[Coupon rate]]
* [[Company law]]
* [[Daily rate]]
* [[Corporate governance]]
* [[Day count conventions]]
* [[Corporate social responsibility]]
* [[Effective annual rate]]
* [[Employee]]
* [[Money market]]
* [[Equity]]
* [[Nominal]]
* [[Financial reporting]]
* [[Periodic discount rate]]
* [[Interest]]
* [[Periodic rate of interest]]
* [[Member]]
* [[Periodic yield]]
* [[Share]]
* [[Quarterly rate]]
* [[Shareholder]]
* [[Rate of return]]
* [[Shareholder value]]
* [[Semi-annual rate]]
* [[Shareholders’ funds]]
* [[Nominal annual yield]]
* [[Shareholders’ wealth]]
* [[Stakeholder analysis]]
* [[Stakeholder pension scheme]]
* [[Sustainability]]
* [[Task Force on Climate-related Financial Disclosures]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Long_term_funding]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]

Revision as of 11:06, 5 August 2021

Corporate social responsibility - company law - corporate governance.

Stakeholders are all the people and bodies who have a legitimate interest in an organisation's activities, including shareholders but also covering a much wider group of interest holders.

One important group of stakeholders are lenders - also known as debt investors.


The term Stakeholders may be defined very broadly, and the breadth of its definition has been increasing over time.

In the business context, stakeholders are normally considered to include, as a minimum, shareholders, lenders and employees.


See also

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