Flotation Cost
A flotation cost is one of the costs of raising capital which a business might incur. It is most commonly associated with issuing equity securities such as stocks. In some cases, it can also apply…
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Retain Earnings
Retained earnings refer to the portion of net income (or loss) that is retained by a company rather than distributed to its owners as dividends. It is a business generates earnings which can be positive…
Comprehensive Differentiate between WACC and MCC
Comprehensive Differentiate between WACC and MCC – The weighted average cost of capital – The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all…
Equity financing does not have any cost – Explanation
‘Equity financing does not have any cost’ – Equity financing is the procedure of raising capital through the sale of shares in an enterprise. It is the method of raising capital by selling company stock…
Existence and growth of a firm depends on its working capital – Explain
Existence and growth of a firm depends on its working capital – Working capital is the amount of a company’s current assets minus the number of its current liabilities. Working capital is the amount of…
Components of Cost of Capital
The cost of capital or required rate for return a firm can be defined as the composite cost of the firm’s financing components. The cost of capital is the rate of return a firm must…
Importance and Necessity of Cost of Capital
Cost of capital: The cost of capital or required rate for return a firm can be defined as the composite cost of the firm’s financing components. The cost of capital is the rate of return…
Factors that affect Cost of Capital are generally beyond firm’s control
The cost of capital or required rate for return a firm can be defined as the composite cost of the firm’s financing components. The cost of capital is the rate of return a firm must…
Why debt is called as the cheapest source of finance?
When a company borrows money from persons or any other financial institution that creates liability for the company is called debt. Simply, it is a sum of money that is owed or due. Debt is…
Debt – Definition
Debt: When a company borrows money from persons or any other financial institution that creates liability for the company is called debt. Simply, it is a sum of money that is owed or due. This…
Differentiate between Yield to Maturity (YTM) and Yield to Call (YTC)
The yield to maturity (YTM) is that discount rate which causes the present value of the promised payment stream to equal the current price of the bond. It asserts that the bond will be redeemed…
Dividend Discount Model (DDM)
Dividend Discount Model (DDM) The dividend discount model (DDM) is a method of valuing a company’s stock price based on the theory that its stock is worth the sum of all of its future dividend…
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