Blog

Retained earnings represents the earnings accumulated by the firm over its life.​

Because interest is a tax-deductible expense, the effective cost of debt is less than the stated rate of interest.

The marginal cost of capital

Risk analysis may be introduced by

The retention of earnings instead of paying dividends

Long-term assets such as plant spontaneously vary with sales.​

The retention of earnings instead of paying dividends

If two investments are not mutually exclusive, the firm can make only one of them.​

If interest rates are 9 percent, an annuity of $100 for 10 years is to be preferred to $1,000 after 10 years.​

If interest rates are 9 percent, an annuity of $100 for 10 years is to be preferred to $1,000 after 10 years.​