a beta is estimated based on the average beta among a group of similar public companies. Analysts may refine this beta by calculating it on an after-tax basis. The assumption is that a private firm's beta will become the same as the ...
How is calculating financial leverage different in the investment field compared to corporate finances? Define financial risk. Why is risk analysis so important to capital investment decisions? Discuss the importance of financial, cost, and managerial accounti...
Why does it make sense to add the value of excess cash to the value of the discounted cash flows when we use the WACC or FCFE approach to value a business? Explain the two reasons why the shorter the payback period the more attractive ...
Why do taxes not matter when you are calculating the break-even EBIT for a company? Explain the cash conversion cycle (CCC) and net working capital. Why is this important to the contemporary executive? How do executive decisions regarding CCC and net working capital affect the ...
It is important to remember that for investors, it is not just about getting your money back but also making a profit – IRR is a good way to quickly assess your potential returns. Internal Rate of Return Example The following table provides a hypothetical example of calculating the IRR of ...
Calculating levelised costs of energy Capital costs are the most important parameters in the case of the renewable-energy sources. For onshore wind, the minimum this year may be taken as $1,100/kW. This reflects the weighted average for India quoted in the Renewables 2018 Global Status Rep...
Capital budgeting is a procedure that analyzes potential investments and gives a reasonable decision-making basis. It is used to create an assets and investments quantitative summary.Answer and Explanation: The capital budgeting relies on the analysis of cash flows rather tha...
Why do people prefer direct method instead of indirect method when calculating operating cash flow? Explain why cash flow statements are prepared and mention their uses. In analyzing the statement of cash flows, why is it important that it be segment...
Explain how a firm might shift its capital structure so as to change its weighted average cost of capital (WACC). What would be the impact on the value of the firm? Explain why it is important for stock investors to understand correlations bet...