Systematic Risk – Meaning, Types And How To Measure It
Systematic risk occurs due to macroeconomic factors. It is also called market risk or non-diversifiable or volatility risk as it is beyond the control of a specific company or …
Investment Decisions
Advantages and Disadvantages of Payback Period
Business managers often face scenarios when they have to choose between projects. Such business decisions are very crucial as resources are limited. Thus, managers need to choose the best …
Formula for Cash Flow
Why is Formula for Cash Flow Important? A formula for cash flow is an analytical way of investigating into the flow of funds in a business. Of course, every …
How can a Capital Budgeting Decision Go Wrong?
What is a Capital Budgeting Decision? Capital budgeting decision is the process by which companies make decisions pertaining to fund allocation for huge investment decisions. Instances of capital budgeting …
Advantages and Disadvantages of Profitability Index
Profitability Index (PI) is a capital budgeting tool which helps to decide whether to accept or reject a project. The formula of PI is PI = Present values of …
Financial Securities
Financial Securities – Definition A financial security is a document of a certain monetary value. Traditionally, it used to be a physical certificate but nowadays, it is more commonly …
WACC Calculation
WACC calculation is the computation of the cost of overall capital of a business. The capital structure of a business comprises of components of debt and equity which have …
Advantages and Disadvantages of Weighted Average Cost of Capital (WACC)
There are advantages and disadvantages of the weighted average cost of capital (WACC) which are discussed in details in the post coming ahead. The perfect understanding of the concept …
Advantages and Disadvantages of NPV
There are various advantages and disadvantages of NPV, let’s have a look at each to understand the peculiarities of NPV in depth. These pros and cons will also help …
Equity Investments
What are Equity Investments? Equity investments are nothing but buying into the stocks and shares of companies. Retail, as well as institutional investors, invest into equity for a number …