Opportunity Cost of Capital – Concept, Example, and Consideration
A financial cost of capital, in simple words, is the average cost of financing the current projects. And this cost of capital is always… Read Article
Cost of Capital
Types of Interest Rates
Interest Rates: MeaningThe Rate at which the investors receive their returns on investment or the rate at which borrowers are to pay for their… Read Article
Hamada Equation-Meaning, Example and More
Hamada equation distinguishes the financial risk from the business risk of a levered firm. A levered firm’s capital structure consists of both equity and… Read Article
Tax Shield – Meaning, Importance, Calculation and More
A Tax Shield is the use of taxable expense that helps a business to lower its tax liability. Or, we can say it is… Read Article
Financial Structure – Meaning, Importance and More
The Financial structure is how a company finances its assets and operations. Or, we can say it is the mix of debt and equities… Read Article
Capital Structure Decisions – Importance, Factors, Tips and More
Capital Structure, as the name suggests, means arranging capital from various sources in order to meet the need for long-term funds for the business.… Read Article
Marginal Cost of Capital – Meaning, Uses And More
As we know that a company can raise funds via different sources, such as debt, common stock, and preference shares. Each of these different… Read Article
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.… Read Article
Default Risk Premium – Meaning, Purpose And Calculation
Default risk premium or (DRP) represents the extra return that the borrower must pay the lender for assuming the extra or default risk. It… Read Article
Flotation Cost
What is Flotation Cost in Finance?Flotation cost is the fee charged by an investment banker for its assistance in raising new capital. This cost… Read Article
WACC Calculation
WACC calculation is the computation of the cost of the overall capital of a business. The capital structure of a business comprises components of… Read Article