What is risk free rate of return, Financial Management

Assignment Help:

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 at any other place.  To it a 'risk premium' is added to compensate for uncertainty of receiving the cash flows.

Required rate of return = Risk free rate + Risk premium

 


Related Discussions:- What is risk free rate of return

Explain the market analysis of events, Question 1 Describe the Cost Vol...

Question 1 Describe the Cost Volume Profit analysis. Explain its features, objectives and elements(CVP analysis) Question 2 Write in detail about the classification of

Setting budget goals and objectives, Setting Budget Goals and Objectives: ...

Setting Budget Goals and Objectives: Having collected and analysed all relevant information, and made general forecasts as to the key areas of concern / opportunity and special

Brief on mistakes in linton’s evaluation, Mistakes in Linton's evaluation ...

Mistakes in Linton's evaluation (1) The preliminary investment in working capital should be offset by a working capital release in the final year, assuming a constant level of

Evaluate cost of irredeemable debt subsequent to tax, Q. Evaluate Cost of I...

Q. Evaluate Cost of Irredeemable Debt subsequent to tax? Cost of Irredeemable Debt subsequent to tax: - When a company utilizes debt as a source of finance then it saves a cons

Functional classification of mutual funds, Functional Classification of Mut...

Functional Classification of Mutual Funds Functional classification of Mutual Funds is based on the basic characteristics of the mutual fund schemes for subscription. Mutual Fu

Discuss how a firm can maintain adequate working capital, Question 1 An...

Question 1 Analyse the financial requirements of a FMCG company 2 If you are an investor and are interested in finding out the value of an amount of Rs 10,000 to be received

Problem in the determine of cost of the capital, Q. Problem in the determin...

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 the

Proper credit management, If a credit manager experience no bad debt losses...

If a credit manager experience no bad debt losses over the past year. Would this be an indication of proper credit management? Why or why not

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

what is saving and lone function in ethiopian context

Working capital turnover, Definition of 'Working Capital Turnover': A ...

Definition of 'Working Capital Turnover': A calculation comparing the depletion of working capital to the generation of sales over a provided period. This provides some useful

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