Determining Cost of Capital: The Key to Firm Value - Softcover

Johnson, Dr Hazel.

Softcover

ISBN 10: 0273638807 ISBN 13: 9780273638803

Publisher: Financial Times/ Prentice Hall, 1999

Synopsis

How many vital corporate decisions are based on educated guesses and corporate rules-of-thumb?  Effective executive decisions demand a more robust framework of analysis. Making the right decision about major capital investments depends in large measure on the firm's cost of capital.  An investment in property, equipment or another company is advisable if the investment will earn the cost of capital.  If the investment does not clear this hurdle rate, the value of the firm will decline.  The correct assessment of the cost of capital is one of the most critical management decisions. Determining Cost of Capital helps managers identify each source of capital and to differentiate these sources. The books answers several critical questions:What are the factors that attract a firm's cost of capital in the case of each supplier of capital?  How does a change in the cost of capital affect the selection of capital projects?  How is risk and uncertainty incorporated into the cost of capital? Both the book and accompanying software are designed to be a ready resource to support management efforts in maximising the value of the firm.

About this title

About the Author

Dr Hazel J. Johnson is currently Distinguished University Scholar at the University of Louisville and Professor of Finance (USA).  Dr Johnson was formerly a member of the finance faculty of Georgetown University (Washington, DC, USA). She is the author of over twenty publications in the areas of international finance and financial institutions.  With publications in the USA, Europe, Latin America and Asia, Dr Johnson's work has been translated into Japanese and Spanish. In addition, she has developed software systems for business practitioners in the areas of bank valuation, capital budgeting, cost of capital and mergers and acquisitions. Dr Johnson has acted as a consultant to more than fifty major US financial institutions and a number of state and federal agencies.

Edition details

• Publisher: Financial Times/ Prentice Hall
• Publication date: 1999
• Language: English
• ISBN 10: 0273638807
• ISBN 13: 9780273638803
• Binding: Paperback
• Number of pages: 224