Shareholders want managers to maximize the (Click to select) dividend expected return financial assets higher lower market value opportunity cost of capital real assets shareholders of their investments. The firm faces a trade-off. Either it can invest its cash in (Click to select) dividend expected return financial assets higher lower market value opportunity cost of capital real assets shareholders or it can give the cash back to (Click to select) dividend expected return financial assets higher lower market value opportunity cost of capital real assets shareholders in the form of a(n) (Click to select) dividend expected return financial assets higher lower market value opportunity cost of capital real assets shareholders and they can invest it in (Click to select) dividend expected return financial assets higher lower market value opportunity cost of capital real assets shareholders . Shareholders want the company to invest in (Click to select) dividend expected return financial assets higher lower market value opportunity cost of capital real assets shareholders only if the (Click to select) dividend expected return financial assets higher lower market value opportunity cost of capital real assets shareholders is (Click to select) dividend expected return financial assets higher lower market value opportunity cost of capital real assets shareholders than they could earn for themselves in equivalent risk investments. The return that shareholders could earn for themselves is therefore the (Click to select) dividend expected return financial assets higher lower market value opportunity cost of capital real assets shareholders for the firm.
Cost of Capital
Shareholders and investors who invest into the capital of the firm desire to have a suitable return on their investment funding. The cost of capital reflects what shareholders expect. It is a discount rate for converting expected cash flow into present cash flow.
Capital Structure
Capital structure is the combination of debt and equity employed by an organization in order to take care of its operations. It is an important concept in corporate finance and is expressed in the form of a debt-equity ratio.
Weighted Average Cost of Capital
The Weighted Average Cost of Capital is a tool used for calculating the cost of capital for a firm wherein proportional weightage is assigned to each category of capital. It can also be defined as the average amount that a firm needs to pay its stakeholders and for its security to finance the assets. The most commonly used sources of capital include common stocks, bonds, long-term debts, etc. The increase in weighted average cost of capital is an indicator of a decrease in the valuation of a firm and an increase in its risk.
Shareholders want managers to maximize the (Click to select) dividend expected return financial assets higher lower market value
Shares refer to a unit that depicts the ownership held by the investor in the capital of the company and thus provides the investor with the right to have an equal claim on the asset of the company. Shares are further divided into two. equity shares and preference shares. Equity shareholders enjoy voting rights and preference shareholders enjoy preference for dividends.
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