The Cost of Capital Intermediate Theory [Hardcover]

A thorough exposition of the theory relating to the cost of capital.This book provides a thorough exposition of the theory relating to the cost of capital. This is a core subject in academic finance and is also of genuine practical importance; any serious attempt to value a business requires an estimate of its cost of capital. This book seeks to explain models and arguments in a way which does justice to the reasoning, whilst minimising the prior knowledge of finance and maths expected of the reader. It is intended primarily for students at advanced undergraduate level, MSc or MBA level.This book provides a thorough exposition of the theory relating to the cost of capital. This is a core subject in academic finance and is also of genuine practical importance; any serious attempt to value a business requires an estimate of its cost of capital. This book seeks to explain models and arguments in a way which does justice to the reasoning, whilst minimising the prior knowledge of finance and maths expected of the reader. It is intended primarily for students at advanced undergraduate level, MSc or MBA level.This volume provides a thorough exposition of the theory relating to the cost of capital--a core subject in academic finance and also of genuine practical importance. Any serious attempt to value a business requires an estimate of its cost of capital. This book explains models and arguments in a way which does justice to this reasoning, while minimizing the prior knowledge of finance and maths expected of the reader. It is intended primarily for students at advanced undergraduate levels.Preface; Part I. Expected Returns on Financial Assets: 1. The cost of capital under certainty; 2. Allowing for uncertainty: contingent states; 3. The capital asset pricing model and multifactor models; 4. The consumption-based model; 5. The equity risk premium; Part II. A Project's Cost of Capital: 6. Project valuation; 7. Corporation tax, leverage and the weighted average cost of capilS(