Finance

Introduction The cost of equity is the opportunity cost of raising funds through equity. In other words, it is the minimum rate of return that a firm must offer to its shareholders to compensate for bearing risk and waiting for their returns. A firms shareholders always have an opportunity to sell their existing shares and invest in another company. The return they require from investments in a firm is, at the same time, the firms cost of equity, that is, the opportunity cost of raising funds through...

When the management of a company feels that they should make the company public, one option they can always use is to offer its shares to the public through an Initial Public Offer (I.P.O.). This is usually a means through which some companies come up with capital. There are two types of IPOs. The first one is the traditional method whereby a company floats its shares in the stock market through underwriting banks or stock brokerage firms. The second method, which is relatively new in the stock...

PART I DO YOU THINK FINANCE DEPARTMENTS ARE THE BEST PLACE TO TRAIN FUTURE CEOs The responsibilities and duties of Chief Finance Officer (CFO) for any company are sine qua non and pivotal in the financial standing and position of any company. It is sole responsibility of CFO to assure and play a role of guardian to comply with all the rules and regulations of Generally Accepted Accounting Principles (GAAP) and Securities and Exchange Commissions (SEC). To grind all together, the CFO of the company...

Every company must assess and evaluates its cash position before the declaration of cash dividend to their share holders. The main reason behind this evaluation is to make sure that company should have indispensable cash to continue the operating activities and also ample cash is available for daily expenses. At this particular juncture, it is very important to understand that dividend is a reward for stockholder in response to their investments and also it creates trusts on their investments. Generally,...

Quantitative easing What is quantitative easing Usually, central banks try to raise the amount of lending and activity in the economy indirectly, by cutting interest rates. Lower interest rates encourage people to spend, not save. But when interest rates can go no lower, a central banks only option is to pump money into the economy directly. That is quantitative easing (QE). The way the central bank does this is by buying assets - usually financial assets such as government and corporate bonds...

The fact that the United Kingdom is still reeling under the economic pressures brought about by the global economic crisis is proof enough that the country is in dire need of policies which will help mitigate the risks that are brought about by such financial crises. In fact, it is a time measures were put in place to ensure such crises do not recur in the future as no-one is prepared to bear the huge burdens that come with them. Policy think-tanks and institutions of higher learning are expected...