Free notes, textbooks, and exam-focused resources designed for Indian banking professionals.
Trade Credits (TC) denote the credits extended by the overseas supplier, bank, financial institution and other permitted recognised lenders for maturity, for imports of capital/non-capital goods permissible under the Foreign…
Common misconceptions about the cost of capital include believing it is solely the cost of equity, considering it a desired return rather than a required return, thinking it is a…
Cost of capital is the cost of raising money for a business, while flotation costs are the fees a company pays when issuing new securities. Flotation costs are a factor…
Divisional and project cost of capital are the minimum rates of return required for projects or divisions that have different risk profiles than the company as a whole. For example,…
Definition of Optimal Capital Budget: The optimal capital budget for a company is the point where the cost of raising capital equals the expected return. This can be determined using…
Commercial Paper (CP) is an unsecured, money market instrument issued under section 45 W of the RBI Act. The corporates including Non-Banking Financial Companies and All India Financial Institutions (AIFIs)…
The marginal cost of capital (MCC) is the total combined cost of debt, equity, and preference shares, taking into account their respective weights in the company’s total value. This cost…
The weighted average cost of capital (WACC) is the average rate that a business pays to finance its assets. The purpose of WACC is to determine the cost of each…
The Reserve Bank of India (RBI) defines a personal loan as a type of unsecured credit that individuals can obtain from financial institutions. Personal loans can be used for various…
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