Archive about 'Cost Of Capital'
Tweet Click to the respective topic on Cost Of Capital Content Page On COST OF CAPITAL 1.0 Factors Affecting a company’s cost of capital 2.0 Cost Of Capital For Common stocks-Retained Earnings or Internal Equity 3.0 Cost Of Capital For External Common Equity 4.0 Basic Understanding of Cost Of Capital –Weighted Average Cost Of Capital
Tweet In earlier article, we understand the concept of cost of capital or weighted average cost of capital of a firm. This article reviews the concept of marginal cost of capital: The basic concept of Marginal Cost Of Capital Incremental cost the firm will need to pay to raise an additional dollar of capital This [...]
Tweet There are two means of getting finance from common stocks namely: Retained earnings or internal common equity(Ke) External common equity (Kne)- the issuance of NEW common stocks. Let’s see how we can compute the aforesaid’s cost of capital Method To Compute Of Cost Of EXTERNAL Common Equity The cost of issuing new common stock(Kne) [...]
Tweet There are two means of getting finance from common stocks namely: Retained earnings or internal common equity(Ke) External common equity (Kne)- the issuance of NEW common stocks. Let’s see how we can compute the aforesaid’s cost of capital Methods To Compute Of Cost Of INTERNAL Common Equity Dividend Growth Model Capital Asset Pricing Model [...]
Tweet Some of the major factors which affect a firm’s cost of capital are: 1.0 Dependent on the overall country’s economic conditions When inflation rate is increasing, cost of doing business is more expensive hence investors and lenders will demand a higher rate of return which results in a higher cost of capital When the [...]
Tweet Very often, we heard of the terms “cost of capital” and or weighted average cost of capital (WACC) used in maximization of shareholders’ wealth or in the Economic value added methodology. What is this Cost of Capital or Weighted Average Cost Of Capital? Firstly let’s look at what’s Cost of Capital: It is the [...]