A company has two primary sources of finance, Debt, and Equity. We typically divide the debt financing into the long-term and short-term financing categories. Companies often use Short-term debts for operating needs such as working capital management and accounts payables. What Is Unsecured Short-Term Financing? We can define any financing options under the unsecured and […]
Unsecured Sources of Short-Term Financing Read More »
When comes to unequal-lived and mutually exclusively projects, the annualized net present value is used as a decision rule for the project investment appraisal or capital budgeting decision or techniques. This is one of the capital budgeting refinements that we commonly encounter and use for the investment appraisal. In this article, we cover in detail
Annualized Net Present Value (ANPV) Read More »
Real options in capital budgeting are one of the special forms for capital budgeting refinements. In a traditional procedure of the capital budgeting decisions without the real options, we simply apply any appropriate decision techniques; for instance, NPV or IRR and make the decision. Recently, the real options have emerged and it plays a vital
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Basically, when a corporation or company is in a profit position or has accumulated retained earnings or accumulated profit, such a corporation will consider distributing dividends. The dividend distribution typically depends on the dividend policy of each corporation. Thus, what are those factors affecting the dividend policy of a firm? Before we jump to the
Six Factors Affecting Dividend Policy Read More »
A definitive market entry process an organization may seek after on its own is by constructing an entirely owned subsidiary in the target market. It is a type of foreign direct investment and is known as Greenfield investment. Greenfield projects are an approach to expand into emerging business sectors. They generally include a parent firm
What Is Greenfield Investment? Read More »
Nowadays, maximizing shareholder’s wealth is critical and has determinant importance towards the success or failure of an organization. Shareholder wealth maximization holds key functions in generating profits for an organization. During the time of business supervisors putting efforts to boost the wealth of their organization, they are actually attempting to raise the firm’s stock price.
How to Maximize Shareholders’ Wealth? Read More »
Small and medium-sized businesses often struggle to cope with lower liquidity. Cash crunch proves a tangling problem than profitability. Delayed accounts receivables and uncertain economic conditions affect the cash flows for small businesses in particular. Small businesses funded with a limited contributed capital cannot raise financing from capital markets such as stock or bond markets.
Short-Term Financing Options for Small Businesses Read More »
There are two sources of finance for any business; Equity and Debt. Debt financing can further be categorized as long-term and short-term financing facilities. Short-term financing is a widely used option for funding business operational activities. Many businesses struggle with delayed accounts receivable and lack of cash and look for bank financing. What is Short-Term
What is Short-Term Financing? All You Need to Know! Read More »
The cost of capital of a company represents the opportunity costs of the funds available to it for investing in different projects. Similarly, it can be defined as the required rate of return, which is a vital part of the capital budgeting process of a company. Companies need the cost of capital to evaluate different
Weighted Marginal Cost of Capital (WMCC) Read More »
Debt is a type of finance that companies from third-parties, such as financial institutions. It is a great source of finance to fund large acquisitions that companies may not be able to afford in other circumstances. In a debt arrangement, there are only two parties involved, the borrower and the lender. In the case of
How to Calculate Cost of Debt? All You Should Know! Read More »
