Corporate Fin Mgt NDLM.PDF

9.2 In other words the Miller model explains the possibility of estimating the value of a levered firm with both corporate and p ...

Therefore, the cost of monitoring will be passed on to the stockholders. This agency cost may reduce the tax benefit arising out ...

CAPITAL BUDGETING DECISIONS (Source:- Book on Financial Management by Prof. I.M. Pandey) Capital budgeting means investment deci ...

Replacement to reduce the cost Expansion to raise the protection level. New machinery installation for new product To meet the ...

will take in to account the capital cost. It may be defined as the number of years required to recover the investment from disco ...

6.2 Mere using of these quantitative methods to take decision may be misleading. The realities in the form of constraints, possi ...

Risk and returns varies directly. The concept of ‘payback period’ is used to measure risk in capital budgeting decision. The pay ...

1.3 The variation in the discount factor reflects the investor attitude towards risk. The higher the discount factor, the less a ...

3.2 A given change in one of the variables will cause change in the NPV or IRR of a project. Analysis of change is called as sen ...

Standard Deviation as an absolute measure of risk 5.1 The dispersion of cash flows is the difference between the possible cash ...

6.3 Following steps should be followed to construct a decision tree. 6.3.1 Define the investment proposed 6.3.2 List out the cle ...

Cost of Capital including CAP-M (Source:- From the book on Financial Management by Prof. I.M. Pandey) Cost of capital can be use ...

Implicit Cost 2.1 When retained earnings are used as source of funding, there will be no explicit cost. The undistributed prof ...

4.4 In the case of debt issued at a premium, there will be a difference between the face value and the book value of such securi ...

4.15 The EPS (Earning per Share) and the MVS (Market value of Shares) shall not be affected because of new issue of shares. The ...

this together amounts to composite cost. Again the source of funds may not be used in equal proportions to form capital structur ...

6.3 Risks are of two types, viz., (i) Diversifiable, and (ii) Non-diversifiable. 6.4 Diversifiable Risk is also known as Unsyste ...

market risk on a asset price. Beta is the change of an asset price to change in overall market price, and a measure of relative ...

2.2.1 Conversion ratio is the ratio in which a bond can be exchanged for equity shares. 2.3 Conversion Price : 2.3.1 Conversion ...

5.1 There are two varieties of public sector undertaking (PSU) bonds, namely taxable bonds and tax free bonds. A PSU may issue t ...