What is risk adjusted discount rate, Financial Management

Assignment Help:

Q. What is risk adjusted discount rate?

The risk adjusted discount rate includes two rates viz

(i) Risk-free rate: - Risk free rate is the usual rate or the usual discount rate that takes care of time element and

(ii) Risk Premium Rate: - Risk Premium Rate is the excess rate or extra rate that takes care of the risk factor.

Therefore the risk adjusted discount rate is the usual or normal discount rate for the time factor plus the extra or additional discount rate.

Related Discussions:- What is risk adjusted discount rate

Vernon’s product life-cycle theory of FDI, strengths and weakness

strengths and weakness

Operational cycle, discuss the applicability of the operational cycle in ve...

discuss the applicability of the operational cycle in vegetable growing business in uganda

CASH MANAGEMENT APPROACHES, WHAT ARE CASH MANAGEMENT APPROACHES

WHAT ARE CASH MANAGEMENT APPROACHES

Cash deficit - cash budget, In two of the four months of the cash budget Th...

In two of the four months of the cash budget Thorne Co has a cash shortage with the highest cash deficit being the opening balance of $40000. This cash shortage which has occurred

Problems in assigning weights, Q. Problems in assigning weights? Proble...

Q. Problems in assigning weights? Problems in assigning weights: for determining the weighted average costs of capital, weight has to assign to the specific cost of the individ

Agency relationship, Solutions to shareholders and government agency proble...

Solutions to shareholders and government agency problemquestion #Minimum 100 words accepted#

BUS 430 Finance Seminar, Image Storage Corporation has 1,000,000 shares out...

Image Storage Corporation has 1,000,000 shares outstanding. It wishes to issue 500,000 new shares using a (North American) rights issue. If the current stock price is $50 and the s

Elements of financial management, Elements of Financial Management: Fin...

Elements of Financial Management: Financial management is the term given to the overall management of an organisation's finances. It includes a number of elements, or systems,

Bond-equivalent yield, Normally, the cash flows from mortgage backed ...

Normally, the cash flows from mortgage backed and assets-backed securities are obtained on monthly basis. Therefore, the yield calculated would be on a monthly ba

Accounting entity - accounting principle, Accounting Entity - Accounting Pr...

Accounting Entity - Accounting Principle For accounting reasons it is suppose that business has separate existence and its entity is different from that of its owner(s). In si

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages