You are here: - Assessing the Cost of Capital -

Assessing the Cost of Capital By: John Pointon Normal price: 125 Our price: 106.25 + postage Bargain: save £18.75 ! Product code: 14730 ISBN: 0273654780 160 pages Format: Pb Published by: FT Prentice Hall, 2002 There are no reviews available for this book

Description of Assessing the Cost of Capital

The cost of capital is essential to all business problems that are concerned with future outcomes. Yet estimating it is a difficult task. The cost of capital lies at the heart of corporate finance, where the individual costs of the firm’s sources of finance are evaluated. To be able to assess the cost of capital is vital to your company’s strategic plan. This briefing provides you with the means to do so. It begins by addressing the implementation of a responsible debt policy framework then evaluates the cost of debt, taking into account tax planning issues at national and international levels. The briefing goes on to consider six approaches to assessing the cost of equity and finally deals with policies and implementation strategies, providing you with a practical framework for managing the cost of capital in your company.

Assessing the Cost of Capital - Chapter headings

Introduction 1. Assessing Earnings - Price-earnings ratio - the starting point - Normalising the cost of equity for competitive markets - Supernormal cost of equity - Encapsulating the effects of competitive advantage 2. Dividend Approaches and the Returns Index - Utilising dividend yields - Regularising dividend growth - Projecting growth splits - Employing a returns index - dividend and capital gains yield 3. Capital Asset Pricing - Perspectives on the risk premium - Explaining the beta risk factor - Pricing capital assets for the diversified investor - International dimensions 4. Multi-factors and Industry Bench-marking - Introducing the firm size factor - Economic values- the 'q' effect - Industry bench-marking 5. Assessing the Cost of Debt - Nominal and market values - Deriving the cost of debt - Introducing tax effects 6. Gearing and the Overall Cost of Capital - A simple weighted average - Gearing and the financial premium approach - De-gearing betas 7. Alternative Approaches to Project Appraisal - Using the weighted average cost of capital - Using the equity flow method 8. Managing the Cost of Debt - Interest cover - Interest rates - Currency risk - Asset backing - Tax planning 9. Overview - Assessing the equity cost of capital - Reviewing the overall cost of capital References Appendix 1