The cost of equity capital
9 important questions on The cost of equity capital
What 2 things does business risk depend on?
2. Operating leverage of the firm
What is the difference between operating leverage and financial leverage?
What is the corporate discount rate?
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What are the market impact costs?
Why is liquidity negatively related to expected return and cost of capital?
What 2 strategies to lower trading costs are there for corporations?
2. Firms should disclose more information
What is the difference between capital budgeting and performance measurement?
What is the EVA formula?
What are the 2 problems with EVA?
2. May increase shortsightedness of managers, as they are rewarded if their current earnings are high
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