Determination of explicit cost of capital, Financial Management

Assignment Help:

Determination of explicit cost of capital

Approach of determination of explicit cost of capital is similar to the one used to ascertain IRR, with one difference, in case of computation of IRR, cash outflows occur at the beginning followed by subsequent cash inflows while in the computation of the IRR, cash outflows occur at the beginning followed by subsequent cash inflows, whereas in computation of explicit cost of capital, cash inflow takes place at the beginning followed by a series of cash inflow subsequently.

Formula used to compute the explicit cost of capital (C) is:

 

1690_Explicit cost.png


Related Discussions:- Determination of explicit cost of capital

Floating-rate securities that have constant quoted margin, Let us look into...

Let us look into few floaters that have constant quoted margin. 1. De-leveraged Floaters 2.  Inverse Floaters 3.  Dual-Indexed Flo

How working capital affect incremental cash flow estimation, How and why do...

How and why does working capital influence the incremental cash flow estimation for a planned large capital budgeting project?  Explain. Many large projects need additional worki

Capital budget relate to pro forma financial statements, Explain how the ca...

Explain how the cash budget and the capital budget relate to pro forma financial statements. The cash budget demonstrates the projected flow of cash in and out of the firm fo

Assignment, how I can use this website?

how I can use this website?

Definition, what is financial management?

what is financial management?

Foreign and domestic investments, What risks are associated with direct for...

What risks are associated with direct foreign investment? How do these risks differ from those encountered in domestic investment?

Find the profit earned by firm in equilibrium, Suppose that Harry and Steve...

Suppose that Harry and Steven make their living selling contraband at opposite ends of a town that is 1 mile long. Because it's a crowded city, the citizens use taxi-cabs for trans

Drawbacks or criticism of mm approach, Q. Drawbacks or Criticism of MM Appr...

Q. Drawbacks or Criticism of MM Approach? Risk Perceptions of personal as well as corporate leverages are different: - It is incorrect to presume that 'personal leverage' is a

Which method should we use to valuate young companies, Which method should ...

Which method should we use to valuate young companies with high growth but uncertain futures? Two examples were Boston Chicken and Telepizza when they began. The great majo

Define terms proprietorship partnership and corporations, Briefly define th...

Briefly define the terms proprietorship , partnership , and corporation . A proprietorship is a business possessed by one person. Two or more people who unite together to

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