The Gordon Growth Model, Explained: How One Formula Values a Dividend Stock
A dividend stock is worth next year's dividend divided by required return minus growth — the Gordon Growth Model, plus the two-stage fix.
Mike Thrift
Marketing Manager
How Fund Managers Get Paid: The 2-and-20 Model, Hurdle Rates, and High-Water Marks
2-and-20 means a 2% management fee plus 20% of profits — but hard vs. soft hurdles and high-water marks decide what you actually keep.
The LIFO Conformity Rule, Explained: Why Electing LIFO for Tax Means Using It on Your Financial Statements Too
Elect LIFO for tax and every owner and lender statement must use LIFO too — Section 472 lets the IRS terminate the election over one FIFO report.
Locked Box vs. Closing Accounts: How Buyers and Sellers Fix the Purchase Price
A locked box freezes the price on an old balance sheet, so interim profit goes to the buyer; closing accounts true it up at closing. Which side each favors.
MIRR, Explained: How the Modified Internal Rate of Return Fixes IRR's Reinvestment Fantasy
MIRR fixes IRR by compounding interim cash at a realistic reinvestment rate — a 21.7% IRR becomes an honest 17.8% you can actually earn.
Notes Receivable, Explained: How Written Promises to Pay Differ From Open Accounts
A note receivable is a signed promise to pay principal plus interest — book the principal as an asset swap, accrue interest monthly, act fast on dishonor.
Preferred Equity in Real Estate Deals, Explained: How the Pref Sits Between Senior Debt and Common Equity
Preferred equity sits between senior debt and common equity: a fixed 10–18% pref paid before common, with control rights but no foreclosure.
Right of Return, Explained: How ASC 606 Books Sales Your Customers Can Send Back
Under U.S. GAAP, ASC 606 books expected returns as variable consideration: revenue only for what you keep, plus a refund liability and recovery asset.
SaaS Gross Margin, Explained: What Belongs in COGS, the 75–80% Benchmark, and Why AI Inference Is Dragging It Down
SaaS gross margin should clear 75–80%, with subscription margins near 90% — but AI inference costs are dragging AI-native products toward 50–60%.
Securities Lending, Explained: How Your Broker Lends Your Shares to Short Sellers and Splits the Fee
Your broker can lend your fully paid shares to short sellers and split the fee — but lent shares lose SIPC cover, voting rights, and qualified-dividend rates.
Stock Issuance and Offering Costs, Explained: Why Your IPO Fees Reduce Paid-In Capital Instead of Hitting Your P&L
Equity offering costs reduce additional paid-in capital, never earnings; debt issuance costs amortize into interest expense. Entries, authorities, and mistakes.
Street Name vs. Direct Registration (DRS), Explained: How Your Broker Holds Your Shares
Street name puts Cede & Co. on the company register; DRS puts your name there. How each works, what transfers cost, and which fits your holdings.