Search results
Results from the WOW.Com Content Network
The capital gains on the Dow Jones Industrial Average have been 1.6% per year over the period 1910–2005. [3] The dividends have increased the total "real" return on average equity to the double, about 3.2%. The sensitivity to market risk (β) is unique for each firm and depends on everything from management to its business and capital structure.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Importantly, it is dictated by the external market and not by management.
A = Capital recovery (amortization) factor F = Sinking fund amortization factor I = Investment S = Estimated salvage value = Operating expense stream d = CCA rate per year for tax purposes t = rate of taxation n = number of years i = cost of capital, rate of interest, or minimum rate of return (whichever is most relevant) and where
Working capital (WC) is a financial metric which represents operating liquidity available to a business, organisation, or other entity, including governmental entities. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Gross working capital is equal to current assets.
The capital charge is the cash flow required to compensate investors for the riskiness of the business given the amount of economic capital invested. The cost of capital is the minimum rate of return on capital required to compensate investors (debt and equity) for bearing risk, their opportunity cost.
The Modigliani–Miller theorem (of Franco Modigliani, Merton Miller) is an influential element of economic theory; it forms the basis for modern thinking on capital structure. [1] The basic theorem states that in the absence of taxes , bankruptcy costs, agency costs , and asymmetric information , and in an efficient market , the enterprise ...
The economic value of physical outputs minus the economic value of physical inputs is the income generated by the production process. By keeping the prices fixed between two periods under review we get the income change generated by a change of the production function.
In economics, the wage share or labor share is the part of national income, or the income of a particular economic sector, allocated to wages . It is related to the capital or profit share, the part of income going to capital, [1] which is also known as the K–Y ratio. [2] The labor share is a key indicator for the distribution of income. [3]