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Cost of capital

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Cost Of Capital
Business / Finance / Cost Of Capital: Refers to over-the-counter trading. 'The price I must pay to obtain the securities you wish to buy is [$]'. Usually, a standard markup (1/8) is then applied for resale to this buyer.

cost of capital
Financial Terms Canada - cost of capital
the opportunity cost of the funds employed as the result of an investment decision; the rate of return that a business could earn if it chose another investment with equivalent risk ...

Cost Of Capital
An economic concept that may be defined in various ways. 1) A discounted rate equating the market value of securities with the current value of cash flows to the security owners. 2) A discount rate equating market value of ...

Cost of capital
The cost of capital is the rate of return that providers of capital demand to compensate them for both the time value of their money, and risk.

Cost of Capital Model
A way of estimating the required rate of return on a business investment such as small business ownership.

cost of capital (COC)
the weighted average cost of the
various sources of funds (debt and stock) that comprise a
firm's financial structure ...

The Cost of Capital is the cost a firm incurs from financing through debt and Equity . From a shareholder's standpoint the cost of capital is the required rate of return in the market for an Investment of equal risk.

Definition of
cost of capital
Treasury Management
interest paid on operating capital interest paid on the capital used in operating a business ...

cost of capital
rate of return that is necessary to maintain market value (or stock price) of a firm, also called a hurdle rate, cutoff rate,or minimum required rate of return.

Average Cost Of Capital
Average Cost Of Capital definition :
A firm's required payout to bondholders and stockholders expressed as a percentage of capital contributed to the firm.

Cost of capital
The required return for a capital budgeting project.
Cost of funds
Interest rate associated with borrowing money.

AVERAGE COST OF CAPITAL - A firm's required payout to bondholders and stockholders expressed as a perce...
AVERAGE DAILY BALANCE - The interest you owe on your credit card or earn on a saving account may be cal...

See also: Cost of Capital, Cost of Equity, Debt, Discount Rate, Equity, Market Value
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Economic Spread
Shareholder Value Added - SVA ...

Incremental Cost of Capital
Financial & Investment Dictionary:
Incremental Cost of Capital
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Weighted Average Cost of Capital (WACC) Question with Expected Return Model
Weighted Average Cost of Capital (WACC) Question with Dividend Growth Model ...

Beta coefficient
Cost of capital
Discounted cash flow
Economic Value Added
Internal rate of return
Minimum acceptable rate of return
Modigliani-Miller theorem
Net present value
Opportunity cost ...

Dictionary Finance A Average Cost of Capital
Finance Dictionary - A Terms
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Cost of capital
Measures the opportunity cost incurred by a company for holding the level of required capital.

Cost of Capital. For any given level of corporate risk, the cost of capital faced by f1rn1s in a given country --a key element of their competitiveness --is essentially determined by four factors: (1) interest rates, or the cost of borrowing, ...

Cost of Capital The weighted average cost for long-term funds raised by a company from different sources such as term loans, DEBENTURES/BONDS, PREFERENCE SHARES, EQUITY SHARES and retained earnings.

Cost of Capital: The rate a company must pay investors to induce them to invest in the company's equity or debt.
Cost of Risk: The cost associated with the risk of a particular event happening.

Cost of capital
The amount a firm must pay the owners of CAPITAL for the privilege of using it. This includes INTEREST payments on corporate DEBT, as well as the dividends generated for shareholders.

Cost of Capital The rate that must be earned by the company to satisfy all the firm's providers of capital. It is based on the opportunity cost of funds.
Coupon Interest payment on debt.

Cost of Capital
The cost of alternative sources of financing to a business.
Currency Risk Sharing ...

Average Cost of Capital
Average Cost of Capital Payout required to be made by a firm to stockholders and bondholders, expressed in terms of a percentage of the contribution of capital.

Cost of Capital
The rate of return required by providers of capital. Providers of capital include banks and investors.
Credit ...

Cost of capital
How to Ace Your First Test Managing Real Money in the Real World: As a teen, you're beginning to make some grown-up decisions about how to save and spend your money.

Cost of capital
The cost of capital is the minimum acceptable rate of return (usually on an after-tax basis) required by the management of the firm to be earned by a capital expenditure. In making this determination, the level of risk is considered.

Cost Of Capital
The required return necessary to make a capital budgeting project, such as building a new factory, worthwhile. Cost of capital includes the cost of debt and the cost of equity.

Annual Cost of Capital Recovery
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Opportunity cost of capital
Expected return that is foregone by investing in a project rather than in comparable financial securities.
Opportunity costs ...

Unlevered Cost of Capital - An evaluation that uses either a hypothetical or actual debt-free scenario when measuring the cost to a firm to implement a particular capital project.

Opportunity cost of capital:
The expected return which is foregone when funds are invested in a project rather than in financial securities with a comparable level of risk.

Opportunity cost of capital The normal rate of return or the available return on the next-best alternative investment. Economists consider this a cost of production, and it is included in our cost examples.

Average cost of capital A firm's required payout to the bondholders and to the stockholders expressed as a percentage of capital contributed to the firm.

One element that has to be considered is a company's cost of capital. The cost of capital is a weighted average cost of debt and equity. You might think of the cost of capital as the cost of money.

In the context of investing, refers to the average cost of shares or stock bought at different prices over time.
Average cost of capital ...

What Is Marginal Cost of Capital?
What Is Short Run Marginal Cost?
What Is the Significance of Differential Cost?

Weighted average cost of capital (WACC)
Expected return on a portfolio of all a firm's securities. Used as a hurdle rate for capital investment.

Weighted Average Cost Of Capital (WACC)
Definition: Expected return on a portfolio of all a firm's securities. Used as a hurdle rate for capital investment.

Weighted Average Cost of Capital (WACC). The Required Rate of Return that must be paid or received by all of the investors with respect to a company's securities. Used as a hurdle rate for capital.

Weighted average cost of capital (WACC) - This method weights the percentage cost of each component by the percentage of that component in the financial structure.

Capital rationing Placing one or more limits on the amount of new investment undertaken by a firm, either by using a higher cost of capital, or by setting a maximum on parts of, and/or the entirety of, the capital budget.

Incremental cost of capital Average cost applicable to the issue of each additional unit of debt and equity.

WACC See: Weighted average cost of capital WEBSSee: World Equity Benchmark Series WFThe two-character ISO 3166 country code for WALLIS AND FUTUNA.

The main difficulties of this method is the determination of the explicit forecast of cash flows, estimating the cost of capital, the calculation of terminal value (TV) and the proper discount rate.

Weighted average cost of capital
Weighted average cost of capital (WACC)
Weighted Average Cost of Capital - WACC
Weighted average Coupon
Weighted average life
Weighted Average Market Capitalization
Weighted average maturity ...

Present value amounts are computed using a firm's assumed cost of capital. The cost of capital is the theoretical cost of capital incurred by a firm.

The corporate income tax raises the cost of capital and reduces after-tax returns in the corporate sector, and thus leads to a migration of capital into noncorporate or taxexempt sectors of the economy.

In judging whether a stock's P/E is attractive we can consider if we assume that growth will only earn the cost of capital then it is difficult to justify a P/E of more than 11 to 12.5.

See weighted average cost of capital....(Read more)
Waiting Period
The period after a company prospectus has been filed but prior to the IPO date, and during which contacts with investors are limited. In ins...(Read more)
Waiver Of Premium ...

The business model indicates how the firm will convert inputs (capital, raw materials and labour) into outputs (total value of goods produced) and make a return that is greater than the opportunity cost of capital and delivers a return to its ...

The downgrade usually has the effect of reducing the security's price and raising the issuer's cost of capital. A downgrade in the rating of a stock by a security analyst (e.g., buy, hold, sell) has more varied effects.

reduced, to allow for the delay in receiving that income, using an interest rate (discount rate) based on the cost of capital.

Tax purpose cost measuring method that allows cost to be increased by the cost of capital improvements or reduced due to depreciation.

Companies that have generated returns on capital higher than their cost of capital for many years running usually have a moat, especially if their returns on capital have been rising or are fairly stable.

free cash flow: cash flow to a firm in excess of that required to fund all projects that have positive net present values when discounted at the relevant cost of capital.

economic profit Profit in excess of the opportunity cost of capital.
economic value A generalization of market value.
economic value added Economic profit.

Is equal to the present value of a future returns, discounted at a marginal cost of capital, minus the present value of the cost of the investment.
Net Profit (net earnings): ...

Residual income: A divisional or company-wide performance measure that subtracts a charge for the cost of capital from after-tax operating income. Residual income represents an attempt to use accounting information to approximate economic profits.

The NPV method uses a discounted rate of interest based on the marginal cost of capital to future cash flows to bring them into to the present. The IRR formula finds an investment's average return for the life of the investment.

The formula is EVA = NOPAT - ( C x Kc ) where C is the amount of capital a company plans to invest in a project, and Kc is the cost of capital, i.e. the return rate expected by investors.

Conceived by consultants Stern Stewart & Co, economic value added is a measure of a company's profitability. It is calculated by subtracting the cost of capital from post-tax operating profit.

The discount rate that gives a set of future cash flows a present value of zero. If the IRR is greater than the opportunity cost of capital, then the relevant project is potentially attractive.
Internal recruitment ...

who takes an active role in any aspect of the investment process, including asset allocation, style exposures, security selection, and risk management in an attempt to improve a portfolio's risk-adjusted return or reduce an issuer's cost of capital.

This when compared to the cost of capital for the company allows the investor to gauge the company's wealth creating ability. Apart from the ratios the investor must also focus on the sustainability of earnings growth.

The lease rate reflects the EDC's low cost of capital. The EDC has no responsibility for the payment of interest and principal on the debt except to pass the business's rent payments through to the investors.

weighted average cost of capital (WACC) - Acronym The average cost of the capital invested in a company, weighted by that company's capital structure of debt and equity funding.

See also: See also: Average cost of capital, Sector, Acquisitions, Capital markets, Mergers

Business  Cost management  Cost of carry

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