Category: FINANCIAL MANAGEMENT

Cost of debt refers to the cost which a company has to bear for using fixed interest bearing securities such as debentures, long-term loans and bonds etc. it is mainly associated with debenture. It has two types Cost of redeemable debt or perpetual debt: perpetual debt refers to issue of debentures which will not be redeemed during the lifetime of Read More …

Businesses acquire funds from market in various forms. These generally include Equity shares, preference share, debentures and long-term loans. The company after acquiring funds from investors, invests those funds in various projects. The investor who contributes funds in any form expects some returns on their contribution. The company must earn a certain rate of return that satisfies their investors expectation. Read More …

Meaning Capital Budgeting decision is considered most important and most critical decision for finance manager. It involves decisions related to long-term investments of capital nature. The returns from such investments are scattered over a number of years. Since it requires huge amount of funds, it is considered irreversible. Some examples of capital budgeting decisions are Purchase of new plant and Read More …