See Also: Cost of Capital Cost of Capital Funding Arbitrage Pricing Theory APV Valuation Capital Budgeting Methods Discount Rates NPV Required Rate of Return Capital Asset Pricing Model (CAPM) The most popular method to calculate cost of equity is Capital Asset Pricing Model (CAPM). Why? Because it displays the relationship between risk and expected return
See also: Price to Book Value Analysis Price to Sales Ratio Analysis Book Value of Equity Per Share (BVPS) Definition Book Value of Equity per Share (BVPS) is a way to calculate the ratio of a company’s Stakeholder equity (as stated in the balance sheet) to the number of shares outstanding. Investors commonly use BVPS
Myths about private equity can inhibit entrepreneurs from pursuing business opportunities and making rational decisions. Private equity financing is a complex decision for business owners. These owners should analyze other financing options and goals for future growth of the company before making important investment decisions. 3 Myths about Private Equity Investors Here are three myths about
See Also: Efficient Market Theory Effective Rate of Interest Calculation Coupon Rate Bond Discount Rate Federal Funds Rate Definition Sharpe Ratio Definition The sharpe ratio definition is the excess return or risk premium of a well diversified portfolio or investment per unit of risk. Measure sharpe ratio using standard deviation. You may also know this
Subsequent Events Definition The definition of a subsequent events are generally defined as events that occurs after the year end period but before the financial statements have been issued. A subsequent event falls underneath the disclosure principle and can be confusing to many accountants that encounter them. However, the codification provides guidance under ASC 855
See Also: Secondary Market Securities Act of 1933 New York Stock Exchange (NYSE) Primary Market Sarbanes Oxley Act of 2002 (SOX) Securities Exchange Act of 1934 The Securities Exchange Act of 1934 deals with the regulation of secondary market transactions, or outstanding securities in the market (which can be traded on a daily basis). The Securities and
See Also: Mezzanine Debt Financing (Mezzanine Loans) Collateralized Debt Obligations Outstanding Debt Self-Liquidating Loans Loan Term What Your Banker Wants You to Know Alternative Forms of Financing Subordinated Debt Definition Subordinated debt is a security which has a residual claim upon a company’s assets, after the senior debt holders have had their claims satisfied. Meaning
See Also: Primary Market Securities Exchange Act of 1934 Investment Banks Secondary Market Initial Public Offering (IPO) Securities Act of 1933 The Securities Act of 1933 was a landmark decision in the United States to regulate the issuance of newly issued shares into the market – an initial public offering. The act is also there
See Also: Tokyo Stock Exchange (TSE) National Stock Exchange of India (NSE) Bombay Stock Exchange (BSE) Frankfurt Stock Exchange (FSE) Hong Kong Stock Exchange (HKEX) Shanghai Stock Exchange (SSE) The Shanghai Stock Exchange (SSE) is the third largest exchange in terms of market capitalization. The exchange is currently not open to all foreign investors. Shanghai
Quick Ratio Analysis Definition The quick ratio, defined also as the acid test ratio, reveals a company’s ability to meet short-term operating needs by using its liquid assets. It is similar to the current ratio, but is considered a more reliable indicator of a company’s short-term financial strength. The difference between these two is that
See Also: Convertible Debt Instrument Common Stock Definition Preferred Stocks Hedging Risk Treasury Stock Private Placement Definition The private placement definition is the process of raising capital directly from institutional investors. A company that does not have access to or does not wish to make use of public capital markets can issue stocks, bonds, or
See also: Accounting Principles 5, 6, and 7 Accrual Based Accounting GAAP Rules Generally Accepted Accounting Principles (GAAP) What is GAAP? Full Disclosure Principle Definition As one of the principles in Generally Accepted Accounting Principles (GAAP), the Full Disclosure Principle definition requires that all situations, circumstances, and events that are relevant to financial statement users
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