Market and industry structure and corporate cost of capital
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Market and industry structure and corporate cost of capital some U.K. evidence by P. S. Sudarsanam

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Published by City University Business School in London .
Written in English

Subjects:

Places:

  • Great Britain,
  • Great Britain.

Subjects:

  • Business enterprises -- Great Britain -- Finance.,
  • Corporations -- Great Britain -- Finance.,
  • Industrial organization -- Great Britain.

Book details:

Edition Notes

Bibliography: p. 30-33.

Statementby P.S. Sudarsanam.
SeriesWorking paper series,, no. 80, Working paper series (City University (London, England). Business School) ;, no. 80.
Classifications
LC ClassificationsHG4135 .S83 1986
The Physical Object
Pagination33 p. ;
Number of Pages33
ID Numbers
Open LibraryOL2324003M
LC Control Number86208314

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Downloadable (with restrictions)! The impact of the structural attributes of industries on the cost of capital to constituent firms is examined within the framework of the capital asset pricing model. The relationship between industry structure and systematic risk that the capital asset pricing model posits as the sole determinant of security returns is investigated using regression methodology. Industry Name: Number of Firms: Beta: Cost of Equity: E/(D+E) Std Dev in Stock: Cost of Debt: Tax Rate: After-tax Cost of Debt: D/(D+E) Cost of Capital. Weighted Average Cost of Capital formula = (86,/) x % + (/) x % x () Weighted Average Cost of Capital = % Limitations. It assumes that there would be no change in the capital structure which isn’t possible for all over the years and if there is any need to source more funds.   Capital structure is a statement of the way in which a company's assets are financed. Analysis of capital structure is relevant to understanding the level of risk which a business has. Modigliani and Miller proposed that capital structure is irrelevant when there are no taxes and that % debt is the optimal capital structure when there are taxes.

What is Cost of Capital? Cost of capital is the minimum rate of return Internal Rate of Return (IRR) The Internal Rate of Return (IRR) is the discount rate that makes the net present value (NPV) of a project zero. In other words, it is the expected compound annual rate of return that will be earned on a project or investment. that a business must earn before generating value. The Duff & Phelps Valuation Handbook – International Industry Cost of Capital provides the same type of rigorous industry-level analysis published in the U.S. centric Valuation Handbook – U.S. Industry Cost of Capital, on a global Valuation Handbook – International Industry Cost of Capital can be used to benchmark, augment, and support the analyst's own custom analysis of. The Duff & Phelps Valuation Handbook – U.S. Industry Cost of Capital provides over critical data points (depending on data availability) for approximately U.S. industries that can be used to benchmark, augment, and support the Analyst's own custom analysis of the industry in which a subject business, business ownership interest, security, or intangible asset resides. Once the costs of capital are optimized, a business can apply this cost of capital to various asset and project assessments. The IRR must exceed the WACC. Key Terms. capital structure: The way that a corporation finances its assets through some combination of equity, debt, and hybrid securities.

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