Category: NTA NET

COST OF CAPITAL

Dr. Toran Lal Verma

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 …

PORTER’S GENERIC STRATEGIES

Dr. Toran Lal Verma

Micheal Porter’s Generic strategies state that Irrespective of Industry attractiveness, a firm in any industry may want to gain high market share and position itself higher than its competitors. This can be done mainly in two ways – Either by providing the product at a lower cost than its competitors or by offering a differentiated product Famous author Micheal Porter in Read More …

Capital Budgeting: Meaning, Nature and Process

Dr. Toran Lal Verma

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 …

Wealth Maximization Objective

Dr. Toran Lal Verma

Wealth Maximization Objective is also known as “Value Maximization” or “Net Present Worth Maximization.” This objective is considered appropriate for decision making. Wealth means the wealth of shareholders. The wealth of shareholders is determined by the market value of shares. Wealth also signifies Net Present Value(NPV) which is the difference between the present value of cash inflows and the present Read More …