Net Present Value (NPV) and Internal Rate of Return (IRR)
[vsw id=”mpz9JHQoarw” source=”youtube” width=”611″ height=”344″ autoplay=”no”] Several important decision-making criteria are used to evaluate capital investments. The two most comprehensive and well-understood measures of whether or not a project is profitable are the net present value (NPV) and the internal…
Process and Principles of Capital Allocation
[vsw id=”mpz9JHQoarw” source=”youtube” width=”611″ height=”344″ autoplay=”no”] Capital allocation describes the process companies use to make decisions on capital projects, i.e., projects with a lifespan of one year or more. It is a cost-benefit exercise that seeks to produce results and…
Types of Capital Investments Made by Companies
[vsw id=”mpz9JHQoarw” source=”youtube” width=”611″ height=”344″ autoplay=”no”] Capital investments are undertaken to either maintain the existing business or/and grow it. There are four main types of capital investments: Going concern (or maintenance) projects. Regulatory or compliance projects. Expansion projects. Other projects….
Modigliani–Miller Propositions
[vsw id=”ZLrxAugcvo8″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] A firm’s capital structure is the mix of debt and equity it uses to finance its investments. A capital structure decision aims to determine the financial leverage to maximize a company’s value by minimizing the weighted…
Short-term Funding Choices for a Company
[vsw id=”qwQXR6SdLvA” source=”youtube” width=”611″ height=”344″ autoplay=”no”] The objectives of a short-term borrowing strategy include the following: Ensuring that there is the capacity to handle sudden cash needs. Maintaining sufficient credit sources to fund cash needs. Ensuring that the interest rates…
Environmental, Social, and Governance Investment Approaches
[vsw id=”535QsiUC1UU” source=”youtube” width=”611″ height=”344″ autoplay=”no”] ESG considerations are incorporated in investment choices through responsible investing. The essence of doing so is to reduce risk, preserve asset value, and prevent unfavorable social or environmental effects. The concept of sustainable investment…
Environmental, Social, and Governance Considerations in Investment Analysis
[vsw id=”535QsiUC1UU” source=”youtube” width=”611″ height=”344″ autoplay=”no”] A variety of performance metrics may be used to assess risks related to governance concerns. Among others, such concerns include ownership structure, board independence and composition, and remuneration. Analysts and stockholders have long recognized…
Impacts of Corporate Governance and Stakeholder Management
[vsw id=”535QsiUC1UU” source=”youtube” width=”611″ height=”344″ autoplay=”no”] Weaknesses in corporate governance practices and stakeholder management processes expose a company and its stakeholders to several risks. On the contrary, effective corporate governance and stakeholder management practices can yield benefits for a company’s…
Corporate Governance and Stakeholder Management
[vsw id=”535QsiUC1UU” source=”youtube” width=”611″ height=”344″ autoplay=”no”] Stakeholder management emphasizes the need for a company to consider the needs of all its stakeholder groups. It aims at laying the structure for stakeholder groups to exercise influence, control, and protect their interest…
