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Q. What is denoted by weighted average cost of capital OR Composite? How is it calculated? Exemplify with an example.
Ans. Weighted Average Cost of Capital: - Capital formation of a company consists of different sources of capital. Cost of these diverse sources of capital is as well calculated by different methods. Therefore after the calculation of cost of capital of these diverse sources of capital a practical complexity happen as to what is the cost of overall capital structure of the firm. In order to resolve this problem finance managers developed the concept of Weighted Average Cost of capital. It is as well known as Composite Cost or Overall Cost.
What is the difference between business risk and financial risk? Business risk considers to the uncertainty a company has regarding to its operating income (as well termed as ear
In dual indexed floaters the coupon rate is a fixed rate plus the difference between two reference rates. Purchasers of these securities typically make an assumpt
Q. Just-in-time inventory management? It considerably improves the short-term liquidity of the business with a maximum financing requirement of $138533 rather than $155640. The
what are the basic assumptions of financial management?
Crown Co. is expecting to receive 100,000 British pounds in one year. Crown expects the spot rate of British pound to be $1.49 in a year, so it decides to avoid exchange rate risk
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Explain the concept of the world beta of a security. Answer: The world beta calculates the sensitivity of returns to a security to returns to the world market portfolio. It is
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