Students Education

These are third party FAQs that help investors and students alike to understand the investing world better

What does "agency cost of debt" mean?
Agency cost of debt refers to an increase in cost of debt when the interests of shareholders and management diverge in a publicly owned company. There are c...
Mon, 18 Jun, 2018 at 3:13 PM
Do companies measure their cost of debt with before- or after-tax returns?
Cost of debt is most easily defined as the interest rate lenders charge on borrowed funds. When comparing similar sources of debt capital, this definition o...
Mon, 18 Jun, 2018 at 3:19 PM
What is liquidity?
Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price. Market l...
Mon, 18 Jun, 2018 at 3:27 PM
Difference between Solvency and Liquidity?
Solvency and liquidity are both terms that refer to an enterprise's state of financial health, but with some notable differences. Solvency refers to an...
Mon, 18 Jun, 2018 at 3:42 PM
What is liquidity risk?
Liquidity risk has different meanings in different contexts. In investing terms, bondholders face varying liquidity risks based on the likelihood that they ...
Mon, 18 Jun, 2018 at 3:50 PM
How does market risk affect the cost of capital?
The chief way that market risk affects cost of capital is through its effect on the cost of equity. Companies finance operations and expansion projects with...
Mon, 18 Jun, 2018 at 3:58 PM
What is 'Cost of Capital'?
Cost of capital is the required return necessary to make a capital budgeting project, such as building a new factory, worthwhile. Cost of capital includes t...
Mon, 18 Jun, 2018 at 4:03 PM
What is Cash Flow Statement and how to analyse cash flow from financing activities?
The cash flow statement is one of the most important, but often overlooked, of a firm’s financial statements. In its entirety, it lets an individual, whethe...
Mon, 18 Jun, 2018 at 4:12 PM
What is sensetivity analysis?
A sensitivity analysis determines how different values of an independent variable impact a particular dependent variable under a given set of assumptions. T...
Mon, 18 Jun, 2018 at 4:21 PM
What are some examples of ways that sensitivity analysis can be used?
Sensitivity analysis is an analysis method that is used to identify how much variations in the input values for a given variable will impact the results for...
Mon, 18 Jun, 2018 at 4:32 PM