Everything you need to know about the theories of capital structure. Capital structure theories seek to explain the relationship between capital structure decision and the market value of the firm. There are conflicting opinions regarding whether or not capital structure decision (or leverage or proportion of debt and equity) affects the value of the firm (or shareholder's wealth). There is [...]
Everything you need to know about the Types of Leverages as studied in Financial Management! Leverage is of three types: 1. Operating Leverage, 2. Financial Leverage, and 3. Combined Leverage. Types of Leverages as Studied in Financial Management Types of Leverages - Financial, Operating and Combined Leverages (with Formula) Type # 1. Financial Leverage: Financial Leverage is a tool with [...]
Everything you need to know about the techniques of capital budgeting. Some of the techniques can be grouped in the two categories as mentioned below: 1. Non-Discounted Cash Flow Techniques: (a) Accounting Rate of Return Method (b) Payback Period Method; 2. Discounted Cash Flow Techniques: (a) Net Present Value Method (b) Internal Rate of Return Method (c) Profitability Index Method. [...]