What is the opportunity cost of capitalhow is this rate

Assignment Help Finance Basics
Reference no: EM13451684

a. What is the opportunity cost of capital?
b. How is this rate used in discounted cash flow analysis?
c. Is this rate a single number that is used in all situations?
d.Define financial risk. Why is risk analysis so important to capital investment decisions?
e. What is the goal of cash management?

Reference no: EM13451684

Questions Cloud

There are several ways a company can allocate overhead : there are several ways a company can allocate overhead costs to products produced or services provided. two of these
Mr phillips of southwest investment bankers is estimating : mr. phillips of southwest investment bankers is evaluating the pe ratio of madison electronics conveyors mec. the firms
Bernard madoff a once highly regarded member of the wall : bernard madoff a once highly regarded member of the wall street community recently pleaded guilty of running a 50
What control unit would you recommend in establishing sales : what control unit would you recommend in establishing sales territories for each of the following companies? explained
What is the opportunity cost of capitalhow is this rate : a. what is the opportunity cost of capital?b. how is this rate used in discounted cash flow analysis?c. is this rate a
Find the present value of all future dividends beginning : leland manufacturing company anticipates a noncontact growth pattern for dividends. dividends at the end of year 1
Explain the likely outcomes of the outsourcing policy you : early in their existence many businesses handle their activities internally. as businesses mature and grow they often
Suppose that gm issues a bond with ten years until maturity : suppose that gm issues a bond with ten years until maturity a face value of 1000 and a coupon rate of 7annual payments.
Compute the volume mix and price revenue variances how did : analyze the variances in the following scenarioyou are the nursing administrator for a medical group that expects a

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the company weighted average cost of capital

What is the company's weighted average cost of capital if retained earnings are used to fund the common equity portion. 11.20% 12.00% 13.80% 14.45%

  Why are contingent assets and liabilities like options

Why are contingent assets and liabilities like options? What is meant by the delta of an option? What is meant by the termnotional value?

  Find the maturity risk premium for the 3-year security

Assume the real risk-free rate is 3%, and inflation is expected to be 2% for the next 3 years. A 3-year security yields 5.7%. Find the maturity risk premium for the 3-year security.

  What is the standard deviation of the complete portfolio

Consider the following capital market: a risk-free asset yielding 1.75% per year and a mutual fund consisting of 65% stocks and 35% bonds. The expected return on stocks is 12.50% per year and the expected return on bonds is 3.25% per year. The standa..

  Which action would most likely violate the standard

Which action would most likely violate the standard on suitability for an investment professional managing individual portfolios?

  Calculate the expected return and standard deviation

Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 4%.

  What is the amount of net fixed assets

ABC Company has net working capital of $2,612, current assets of $9,741, long-term debt of $2,652, and equity of $3,926. What is the amount of net fixed assets?

  What is the default risk premium on corporate bonds

Also, corporate bonds have a 0.25% liquidity premium versus a zero liquidity premium for T-bonds, and the maturity risk premium on both Treasury and corporate 10-year bonds is 1.15%. What is the default risk premium on corporate bonds?

  How much interest would you be paying in year 2

Your bank offers to lend you $100,000 at an 8.5% annual interest to start your new business. The terms require you to amortize the loan with 10 equal end-of-year payments. How much interest would you be paying in Year 2? Explain.

  What is the market return

Stock X has a beta of .87 and an expected return of 9.8 percent. Stock Y has a beta of 1.2 and an expected return of 13.1 percent. What is the risk-free rate of return assuming that both stock X and stock Y are correctly priced? What is the market..

  How the current processes used by rating agencies

From the first e-Activity, discuss how the current processes used by rating agencies could be improved. Provide specific examples to support your response.

  What are the annual dividends per share

Cafe de Oro earns $4.25 per share and has a dividend payout ratio of 0.40. If Cafe de Oro has a capital budget of $200,000 and 70,000 shares outstanding, what are the annual dividends per share?

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