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.
What do you understand by the term internal rate of return?
An individual seller within perfect competition will not sell at a price lower than the market price since: w) demand for the product will exceed supply. x) the seller would begin a price war. y) the seller can sell any quantity she desires at the prevailing mar
A positive responsibility played through speculators within a market economy is to: (1) find out price levels for entrepreneurs. (2) predict the quantity at that long run equilibrium would be attained. (3) inform government organizations of consumer p
Business Report Objectives This assessment item relat
This Assignment assesses the following module Learning Outcomes:1. Describe current production concepts and techniques in formulating a manufacturing strategy.2. Discuss the development and implementation of manufacturing strategies in the busi
According to Adam Smith nation's wealth is, not the gold this possesses, but somewhat it’s: (1) number of people. (2) capability to give goods for its people. (3) foreign investments. (4) domestic financial capital. (5) militar
Illustrate Rational Behaviour of Economic Perspective?
Illustrate other than price many factors determine the outcome?
Give a brief introduction of the term Cost of retained earnings?
Describe briefly Operating income approach?
18,76,764
1923902 Asked
3,689
Active Tutors
1448342
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!