Press "Enter" to skip to content

Posts tagged as “corporate finance”

Ch02 Time Value of Money

TIME VALUE OF MONEY Time Value of Money offers an overview of the information required to calculate the future and present values of individual cash flows, ordinary annuities, due perpetuities and investments with uneven cash flows. TVM is based on the concept that a dollar that you have today is worth more than the promise or expectation that you will receive a dollar in the future. Money that you hold today is worth more because you can invest it and earn interest. After all, you should receive some compensation for foregoing spending. This hand out has been divided into following…

Corporate Finance – Problems associated with High gearing and dividend policies

Corporate Finance Semester 2 PROBLEMS ASSOCIATED WITH HIGH GEARING & DIVIDEND POLICIES The following topics will be discussed in this lecture. Problems associated with high gearing Bankruptcy costs Optimal capital structure Dividend policy Types of dividends and important dates Dividend policies Factors influencing dividend policy Irrelevance of dividend policy Problems associated with high gearing A general term describing a financial ratio that compares some form of owner’s equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm’s activities are funded by owner’s funds versus creditor’s funds. The higher a company’s…