Restricted Stock
Restricted stock refers to the shares, the sale or acquisition of which are subject to certain restrictions. The shareholder of restricted shares has to meet these restrictions before they …
Investment Decisions
Interest Tax Shields – Meaning, Importance And More
Interest tax shields refer to the reduction in the tax liability due to the interest expenses. Companies pay taxes on the income they generate. Interest expenses (via loan and …
Default Risk Premium – Meaning, Purpose And Calculation
Default risk premium or (DRP) represent the extra return that the borrower must pay the lender for assuming the extra or default risk. It is commonly used in the …
Types of Cash Flow
Cash Flow and Cash Flow Statements As the name suggests, cash flow means the amount of cash flowing in and out of the company. In order to keep a …
Importance of Capital Budgeting
Capital Budgeting Meaning Capital budgeting is a process that helps in planning the investment projects of an organization in long run. It takes all possible consideration into account so …
Investment Appraisal Techniques
Investment Appraisal Techniques Investment appraisal techniques are payback period, internal rate of return, net present value, accounting rate of return, and profitability index. They are primarily meant to appraise the …
Advantages and Disadvantages of CAPM
What is CAPM? As the name itself suggest the Capital Asset Pricing Model (CAPM) is used for pricing the security with a given risk. This model describes the relationship …
What Is CAGR And How It’s Useful?
CAGR is one term that almost all of us come across when we consider making any investment. But many don’t have a clear idea what is CAGR or how …
Market Capitalization
What is Market Capitalization? Market Capitalization also called as Market Cap, means the market value of the company’s outstanding shares. Its measurement is by multiplication of stock price with …
Dry Powder – A Term Important To Investors, Corporate And Private Equity
Dry powder In the financial world refers to a couple of things – financial reserves and liquidity. Therefore, the term is often used in the area of personal finance, …