Describe the term cost of capital
Briefly describe the term cost of capital and also illustrate out its significance?
Expert
Cost of the capital is the rate of return that is minimum that has to be earned on investments in order to assure the investors of different types who are making investments in the company from debentures, shares and loans. It is employed in financial investment that refers to the cost of a company's funds or the shareholders return on the company's accessible deals. It is the necessary rate that a company should attain to cover the cost of generating funds in the market. Through seeing this only the investor invests the money in the company if the company is giving the necessary rate of return. It is a guideline to evaluate the profitability of various investments. The significance of cost of capital is that it is employed to measure new project of company and permits the computations to be simple so that it has least return that investor expect for providing investment to the company. It has such significance in financial decision making. It really employed in managerial decision making in certain field like- i) Decision on capital budgeting - It is employed to evaluate the investment proposal to select a project that satisfies return on investment. ii) Employed in designing corporate financial structure - it is use employed to plan the market changeability and try to accomplish the economical capital structure for firm. iii) Top management performance - It calculates the financial presentation of top executives. It engages the comparison of real profit of the projects and taken projects entire cost.
When, in a perfectly competitive industry, where the market price facing a firm is above its average total cost on the output here marginal revenue equivalents marginal cost, in that
Question: Why might it be difficult for the Fed to formally adopt inflation targeting? Would inflation targeting be a good policy for the Fed in the present economic environment? Answer:
Describe the Personal distribution of income?
Which of the given is a quality of an oligopolistic market structure? w) There are only some dominant sellers. x) every firm sells a unique product. y) this is easy for new firms to enter the industry. z) Each firm require not react to the actions of
Use the circular flow model to confirm this assertion for the construction of a new high school in Blackhawk county?
Elucidate the various trade which enacted by governments?
Give a brief introduction of the term Risk factor?
Question 7: You are given the following data about two firms: FIRM A Quantity 0 1 2 3 4 5 6 Total revenue ($) 0 10 20 30 40 50 60 Average revenue ($) ___ ___ ___ ___ ___ ___ ___ Marginal revenue ($) ___ ___ ___ ___ ___ ___ Total cost ($) 30 42 50 60 76 100 14
Briefly describe the term explicit cost and implicit cost?
Explain Government expenditures on goods and services and transfer payments?
18,76,764
1922768 Asked
3,689
Active Tutors
1443847
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!