Describe the term cost of capital
Briefly describe the term cost of capital and also illustrate out its significance?
Expert
Cost of the capital is the rate of return that is minimum that has to be earned on investments in order to assure the investors of different types who are making investments in the company from debentures, shares and loans. It is employed in financial investment that refers to the cost of a company's funds or the shareholders return on the company's accessible deals. It is the necessary rate that a company should attain to cover the cost of generating funds in the market. Through seeing this only the investor invests the money in the company if the company is giving the necessary rate of return. It is a guideline to evaluate the profitability of various investments. The significance of cost of capital is that it is employed to measure new project of company and permits the computations to be simple so that it has least return that investor expect for providing investment to the company. It has such significance in financial decision making. It really employed in managerial decision making in certain field like- i) Decision on capital budgeting - It is employed to evaluate the investment proposal to select a project that satisfies return on investment. ii) Employed in designing corporate financial structure - it is use employed to plan the market changeability and try to accomplish the economical capital structure for firm. iii) Top management performance - It calculates the financial presentation of top executives. It engages the comparison of real profit of the projects and taken projects entire cost.
Write down the external factors which influencing the capital structure?
Nature and Scope of Economics: Introduction Economics is a social science that
Elucidate an example of simultaneous changes in both supply and demand?
What 2 points are required to emphasis foreign exchange market?
What is the most important source of revenue and the major type of expenditure at the local level?
Contrast a vertically integrated firm, a horizontally integrated firm, and a conglomerate?
Your firm is worried about being sued for gender discrimination. There is a growing perception that males are being paid more than females in your department. Using the data in the SALARY tab in the Excel file provided, please complete the following using a = .05 a). Do the men appear to earn mo
The utilitarianism of Jeremy Bentham would clash most strongly along with the philosophic principles of: (w) the epicureans who followed the teachings of Epicurus [c. 341 to 271 BC]. (x) hedonism. (y) the Greek philosophers and mediev
Illustrate major economic flows that link U.S. with nations. Provide an example to illustrate each flow. Explain the relationship between the top and bottom flows.
If the price of a good is given, how does a consumer choose/decide as to how much of that good to purchase?
18,76,764
1938898 Asked
3,689
Active Tutors
1447233
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!