Regular assessment of short-term funding aims to ensure that a company has the ability to handle peak cash needs and maintain sufficient sources of credit to fund ongoing cash needs. Short-term Funding The short-term funding alternatives that are available to…

[vsw id=”KxjLLIVuAg0″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] Corporate governance may be defined as the system of internal controls, processes, and procedures by which a company is managed, directed, or controlled. Weak corporate governance practices have resulted in the failures of many…

Corporate governance systems can be influenced by several stakeholder groups which may or may not have conflicting interests. A company’s primary stakeholder groups include its shareholders, creditors, managers, other employees, customers, suppliers, governments or regulators, and its board of directors….

[vsw id=”KxjLLIVuAg0″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] The term ‘Principal-agent relationship’ or just simply, ‘Agency relationship’ is used to describe an arrangement where one entity, the principal, legally appoints another entity, the agent, to act on its behalf by providing a…

[vsw id=”KxjLLIVuAg0″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] Environmental, social and governance factors are collectively referred to by the acronym “ESG.” ESG integration is the practice of considering environmental, social, and governance factors in the investment process. Ideally, ESG integration should be…

[vsw id=”I_SgGrDv1YM” source=”youtube” width=”611″ height=”344″ autoplay=”no”] When estimating the cost of equity using the Capital Asset Pricing Model (CAPM), a reliable estimate of beta must be used. The beta for a company that is not publicly traded may be estimated…

Beta by itself does not adequately capture a country’s risk for companies that are located in developing countries. To appropriately reflect these country risks, the cost of equity is usually adjusted by adding a country risk premium. The country risk…

The cost of the different sources of capital tends to change as a company raises additional capital, thereby resulting in a change in its weighted average cost of capital (WACC). The marginal cost of capital (MCC) schedule depicts this relationship…

[vsw id=”I_SgGrDv1YM” source=”youtube” width=”611″ height=”344″ autoplay=”no”] Flotation costs are expenses that are incurred by a company during the process of raising additional capital. The value of these flotation costs is related to the amount and type of capital being raised….