Cost of capital, Finance Basics

Cost of capital:

The cost of capital is a term related to the field of financial investment to refer to the cost of a company's funds (both equity and debt), from an investor's point of view "the shareholder's needed return on a portfolio company's existing securities". It is used to calculated new projects of a company as it is the minimum return that investors expect for giving capital to the company, therefore setting a benchmark that a new project has to meet.

Posted Date: 2/13/2013 4:36:04 AM | Location : United States







Related Discussions:- Cost of capital, Assignment Help, Ask Question on Cost of capital, Get Answer, Expert's Help, Cost of capital Discussions

Write discussion on Cost of capital
Your posts are moderated
Related Questions

Disadvantage of Joint Stock Companies Difficult to reconstruct the capital Many formalities in forming the company Heavy initial capital outlay. Loss of secrec

Example of EOQ Assumptions ABC Ltd requires 2,000 units of a component in its manufacturing method in the coming year that costs of Sh.50 each. The items are obtainable locall

1. Describe the similarities and differences in between an ordinary annuity, an annuity due, and perpetuity.  Provide a methodical answer, including examples to demonstrate your po

Five years ago, you bought a house for $151,000, with a down payment of $30,000, which meant you took out a loan for $121,000. Your interest rate was 5.75% fixed. You would like to

Bell is considering two marketing options for the Canadian launch of their internet-based video streaming service in the first quarter of 2012.   i. A  "soft" launch using prima

Significance of Cost of Finance The cost of capital is Significance since of its application in the following areas as: i) Long-term investment decisions - In capital b

Disadvantages of Debt Finance It is a conditional finance that is it is not invested along with any approval of lender. Debt finance, whether used in excess may interr

Before purchasing insurance we have to go through different factors. Among different important factors there are two most crucial aspects we should consider before buying insurance

Paper on Estate Planning (3–5 pages) Evaluate the tools commonly used in estate planning, including trusts, life insurance, and annuities. Compare the tools as to how they would a