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Posts tagged as “Rate of Return”

Economic Value Added (EVA)

Economic Value Added (EVA) is a financial performance metric that measures a company's true economic profit—the value created in excess of the required return of the company's investors.

Shareholder Value Analysis (SVA)

Shareholder Value Analysis (SVA), often associated with the work of Alfred Rappaport, is a sophisticated approach to financial management and strategic decision-making. It is founded on the principle that the primary objective of a company should be to maximize the economic value created for its equity shareholders.

Allocating Corporate Capital Fairly

The core principle of "fairness" in this context is generally tied to economic value creation, which means prioritizing investments that promise the highest risk-adjusted returns and align with the company's long-term strategy.

2 Different Methods of Bond Valuation

This is where bond valuation comes in. It's the process of determining a bond's fair market value based on the present value of its future cash flows. Here's a look at the most common ways to value a bond.

3 Different Methods of Equity Valuation

Wise investors know that a company's market price can be influenced by all sorts of things, from market sentiment to temporary news cycles. The real question is: Is the stock's price reflective of its actual worth?

Cost of Capital

Cost of capital is the minimum return a business must earn on its investments to justify the cost of financing and satisfy expectations of both debt holders and equity investors.

Corporate Finance

Corporate finance is a crucial branch of finance that focuses on how corporations manage their financial resources to achieve their strategic goals, primarily maximizing shareholder wealth.

Investment

This article defines investment and answers why businesses invest. It also explains Marginal Efficiency of Capital (MEC) and the determinants of planned investment.