## Cost of Equity – Dividend Discount Model

Cost of equity can be worked out with the help of Gordon’s Dividend Discount Model. The model focuses on dividends, as the name suggests.… Read Article

Cost of equity can be worked out with the help of Gordon’s Dividend Discount Model. The model focuses on dividends, as the name suggests.… Read Article

The cost of preference share capital is the dividend committed and paid by the company. This cost is not relevant for project evaluation because… Read Article

The cost of equity can be defined as the required rate of return an investor would expect against supplying capital. The Expected rate of return… Read Article

The cost of debt is the interest cost that a firm would have to pay for borrowed capital. The interest cost at which the… Read Article

Weighted Average cost of capital (WACC) is the minimum rate of return required to create value for the firm. Investors of equity, debt, preference… Read Article

“Why net present value (NPV) is the best measure for investment appraisal?” This question is as good as another question – “How NPV is… Read Article

What is Capital Rationing?Capital rationing is a technique of selecting the projects that maximize the firm’s value when the capital infusion is restricted. The… Read Article

Profitability Index (PI) is a capital budgeting technique to evaluate investment projects’ viability or profitability. Discounted cash flow technique is used in arriving at… Read Article

The payback period (PBP) is an investment appraisal technique that tells the amount of time taken by the investment to recover the initial investment… Read Article

Modified internal rate of return is a solution to the shortcomings of internal rate of return as a project evaluation technique. There are two… Read Article

The advantages and disadvantages of the internal rate of return are important to understand before applying this technique to specific projects. There must be… Read Article