Problem in the determine of cost of the capital, Financial Management

Assignment Help:

Q. Problem in the determine of cost of the capital?

Conceptual controversies regarding the relationship between the cost of the capital and the capital structure: different theories have been propounded by the different authors explaining the relationship between the capital structure, cost of the capital and the value of the firm. This has resulted into various concepts difficulties. According to the net income approach and the traditional theories both the cost of capital and as well as the value of the firm. This has resulted into various concept difficulties. According to the net income approach and the traditional theories both the cost of capital and as well as the value of the firm have a direct relationship to the method and the level of the financial. in the opinion a firm can be minimize the weighted average cost of the capital and increased the value of the firm by using the debts financing . On the other hand, net operational income and Modigliani and miller approach prove that the cost of capital is not affected by the change in the working capital or say that the debts equity mix is irrelevant in determination in the cost of capital and value of a firm.


Related Discussions:- Problem in the determine of cost of the capital

LEVERAGE, Evaluate the importance of leverage in financial management of a ...

Evaluate the importance of leverage in financial management of a small scale company

Consigner for safe transportation of dangerous goods, Q. Consigner for safe...

Q. Consigner for safe transportation of dangerous goods? It is the responsibility of the consigner to ensure the following, 1. The goods carriage should have a valid registr

Examine the concepts related to financial management, Assume you are a prof...

Assume you are a professional financial analyst working for a wealthy investor.  Your client has $2.6 million to invest and wants to sink it into a single stock (diversification is

Saving and lone assocition, what is saving and lone function in ethiopian c...

what is saving and lone function in ethiopian context

Explain about modern approach of financial management, Q. Explain about Mod...

Q. Explain about Modern Approach of financial management? The modern approach considers the term financial management in a broad sense. According to this approach the finance f

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

Determine the post-merger eps and post-mergershare price, Post-merger EPS a...

Post-merger EPS and post-mergershare price An estimated post-merger EPS can be calculated by: (Combined earnings) / total shares after merger An estimated post-merger s

What is risk free rate of return, What is risk free rate of return Ther...

What is risk free rate of return There is a 'risk free rate of return' (also known as time preference rate) which is used to compensate for the loss of not being able to invest

Describe factors contributing to effective cash management, Describe the ma...

Describe the major factors contributing to effective cash management in a firm.  Why is the cash management process more difficult in a MNC? An effective cash management system s

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