Cost of Debt, Formula, Calculation, and its Benefits

What is Cost of Capital The cost of debt is considered as a specific amount of rate which a company must pay on its overall debt amount. It should be in our best interest that ‘cost of debt’ is analyzed either before tax or after tax return since some companies might as well deduct the...

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Market Risk Premium – Definition, Formula and Calculation

What is Market Risk Premium: The ‘Market Risk Premium’ is considered as an excess return over the stocks purchased by the individuals or the whole market that are associated with risk-free rate. Considering this as compensation, such aspect is being practiced in stock-exchange a market which helps business industrialists and investors in making the right...

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Compensating Balance and its benefits

What is Compensating Balance: The finance professionals have labeled ‘compensating balance’ as the most minimal amount of balance that needs to be maintained in order to keep the account running. It should be in our best interest that compensating balances are commonly used to overcome the unbalanced portion of the expense that banks might experience...

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Best way to calculate company’s overall weighted average cost of capital

What is Cost of Capital: The Weighted Average Cost of Capital is a measurement of a company’s overall cost of capital, which includes the most important categories of the equity to weigh them through a specific equation. This statistical logic has helped numerous businesses worldwide and is considered as the most legitimate act of calculating...

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Understand Organizational Behavior

Organizational Behavior – Essential of a Company Organizational Behavior is a pathway to study the impact over individuals, groups and numerous structures of the organization as a part of their human behavior within the company. According to a research, this includes a slight part about sociology, psychology and emotional intelligence, which exhibits the power of...

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Simple Example of Inventory Valuation

What is Inventory Valuation The finance professionals consider Inventory Valuation as the dollar amount which is linked with all the items associated within the company’s stock. We must solely focus on the amount since it’s considered as the cost of the mentioned items. Nevertheless, it is possible that due to some feeble situations or environmental...

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Shareholders Equity and its Components

The shareholder equity is a corporate practice which is showcased by investors and professional accountants in the companies to evaluate how an organization manages its investments and controls the amount of money which has been used through lending to understand the organizational valuation in the market. Over the years, finance professionals have understood that shareholder...

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