by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is the Weighted Average Cost of Equity?In finance and accounting, cost of equity in a company is determined using the weighted average cost of equity (WACE). Weighted average cost of equity (WACE) calculates the cost of equity in a company by allocated different...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is Off-Balance Sheet Financing?Off-balance sheet financing is a strategy that keeps huge capital expenditures off the balance sheet of the company so as to lower down the debt-to-equity and leverage ratios. When a huge capital expenditure would affect negative...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is a Multistage Dividend Discount Model?Multistage Dividend Discount Model revolves around the Gordon growth model. It is an equity valuation approach and applies fluctuating rates of growth to the calculation. This model implies that various growth rates are...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is Abandonment Value?An abandonment value refers to the cash value earned on a project after it has been abandoned or discontinued. A project or an asset can be abandoned (liquidated or sold) if its net present value of expected cash flow is lower than the amount...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is Weighted Average Cost of Capital?The weighted average cost of capital (WACC) commonly known as the company’s cost of capital, is a method that investors use to assess their investments returns in a company. Debt and equity are two major components that...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is a Rate of Return?Rate of Return (RoR) refers to the net profit or loss of an investment over a period expressed as a proportion of the original cost of an investment. Profits are the income realized from the sale of an investment plus the capital gains. A loss...
