Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. What do you signify by Cost of Capital?
What do you signify by 'Cost of Capital'? What is its meaning and what are the problems in determination of cost of capital?
Ans. Meaning of Cost of Capital: - Cost of capital of a definite is the minimum rate of return expected by its investors. The capital utilized by a firm may be in the form of preference shares, equity shares, debts and retained earnings. The cost of capital is the weighted average cost of these resources of finance used by the firms. The perception of cost of capital occupies a very important role in financial management because the investment decisions are based on it.
Definition:-
As-per to Milton H. Spencer 'The cost of capital is the minimum rate of return which a firm needs as a condition for undertaking an investment.'
As-per to the M.J. Gordon
'The cost of capital is the rate of return a company should earn on an investment to maintain the value of the company.'
Expalin about the Non-Convertible Debentures (NCDs) NCDs are plain debenture securities issued by corporations. They are normally medium term in nature, maturing between 1 to 8
Callable bonds give the right to the issuer to redeem the bond prior to its maturity date, at a specified call price. These bonds are beneficial to the
Determine the meaning of Reportable segments Reportable segments are operating segments or aggregations of operating segments which meet specified criteria(core princ
Expected volatility is a major factor that affects the value of an option. Expected volatility of an option on bond is referred to as 'expected yield volatility'. The
Reacher Technology has consulted with investment bankers and determined the intere Reacher Technology has consulted with investment bankers and determined the interest rate it woul
What are the Reasons why organisations grow Required to provide higher financial returns to investors e.g. increases the wealth of shareholders Possible to achieve econ
Debt holders versus Shareholders A second agency problem arises because of potential conflict between stockholders and creditors. Creditors lend finances to the firm at rates w
What is the De-merger This is splitting up of a group into two or more separate bodies. The group is split into separate entities, but the shareholders remain the same. It is o
Restrictions on Investments: A mutual fund scheme shall not invest more than 15% of its NAV in debt instruments issued by a single issuer, which are rated not below investment
Briefly describe the major differences between a sole proprietorship and a corporation. Under which form would you choose for a business, and why? Describe the meaning of financi
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd