Define the term- cost of capital, Financial Management

Assignment Help:

Define the term- Cost of capital

Cost of capital is the rate of return a firm should earn on its investments for the market value of the firm to remain unchanged. Acceptance of projects with a rate of return below the cost of capital will decrease the value of firm; acceptance of projects with a rate of return above the cost of capital would increase the value of the firm. Objective of the financial manager is to maximize the wealth of firm's owners. Using the cost of capital as a foundation for rejecting or accepting investments is consistent with this goal.

 


Related Discussions:- Define the term- cost of capital

What to do to maximise profits of the company, What to do to maximise profi...

What to do to maximise profits of the company If you want to maximise profits, there are only two methods to do it. Either you decrease your expenses (also known as costs) or y

Volume of issues of central and state government securities, Volume of Issu...

Volume of Issues of Central and State Government Securities The growth of government securities market in India and the investor response to the government bond issues can be k

Capital raising, how can covered bond affect other secutites price

how can covered bond affect other secutites price

Rationale of accounting standards, Rationale of Accounting Standards A...

Rationale of Accounting Standards Accounting Standards are created along with a view to harmonise various accounting policies and practices in use inside a country. The goal o

Determine about the shareholders, Determine about the Shareholders Shar...

Determine about the Shareholders Shareholders, being the owners of the company, elect board of directors and vote on major issues that affect functioning and long term plans of

Initial public offering (ipo), The process by which an organization increas...

The process by which an organization increase money by issuing equity and gets listed on a public stock exchange.

Show the advantages of irr method, Q. Show the Advantages of IRR Method? ...

Q. Show the Advantages of IRR Method? Advantages of IRR Method:- (i) Similar to the other DCF methods IRR methods as well take into consideration the time value of money.

Benefits of e-trading, QUESTION (a) (i) Outline some capabilities of E-...

QUESTION (a) (i) Outline some capabilities of E-Trading. (ii) List three benefits of E-Trading. (b) (i) How can privacy be affected in E-Banking? (ii) Outline two meas

Define depreciation expense, Define depreciation expense as it appears on t...

Define depreciation expense as it appears on the income statement. How does depreciation affect cash flow? The term accounting depreciation is the allocation of an asset's init

Global equity indexes, Global Equity Indexes: As described earlier in t...

Global Equity Indexes: As described earlier in this chapter, there are several stock market indexes available which depict the performance of particular sectors and a country a

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd