Research paper on cost of capital

Capital Structure of Ohio Casualty Corp This 6 page paper looks at the capital structure of Ohio Casualty Corp OCAScalculates the cost of capital for the company and considers what changes may or may not occur if the capital structure was changed. The paper then looks at what impact a change may have on market share and assesses the level of the cost of capital against the industry and competition. The bibliography cites 3 sources.

Research paper on cost of capital

This article presents the most common methods of capital budgeting; discusses economic issues in capital budgeting unique to three types of companies: Steel producers, small companies, and U. Capital Budgeting Overview When a company plans to invest in new facilities, equipment, or products, it may engage in capital budgeting.

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Capital budgeting is a strategy that a company can utilize to plan future investment projects. The process generally involves constructing a formula that considers total funds needed for the project, including working capital; the financial benefits expected from the project; the length of time needed to reap the financial benefits of the project; and whether it is better to forego the project completely.

For example, a company that manufactures furniture is considering whether or not to also start manufacturing its own fabric for the furniture. The furniture manufacturer can use capital budgeting to determine the most financially profitable option for manufacturing fabric among the following four investment projects: Remodel a current facility to accommodate a fabric manufacturing operation.

Build a new fabric manufacturing facility. Purchase an existing fabric manufacturing company. Continue to purchase the fabric rather than manufacture it. If this option is chosen, the project is then removed from consideration as a capital budgeting project. Further Insights As part of the capital budgeting process, companies consider their access to funds; their need for cash flow to operate the company throughout the timeline for any capital budgeting project; and in some instances, their responsibility to shareholders.

Capital Budgeting Valuation Methods A variety of approaches and mathematical formulas may be used in capital budgeting.

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Four of the most common approaches used in capital budgeting are based on the following four valuation methods: NPV reflects the variance between the current amount of cash inflows and the current amount of cash outflows.

Present value refers to the current worth of money that will be received in the future, based on a particular rate of return. IRR, which is sometimes called economic rate of return, refers to the discount rate that renders the NPV of all cash flows for a specific project equal to zero.

Usually, the higher the IRR for a specific project, the more financially attractive the project will be. In DCF, future free cash flows are discounted to arrive at a present value.

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For a project to be considered worthwhile according to this valuation method, the DCF must be greater than the present investment cost. Payback Period The last capital budgeting valuation method is payback period.Capital budgeting is the procedure for establishing whether or not a company should invest in projects such as new facilities or products.

This article presents the most common methods of capital. About. Capital Cost Estimator is a software which estimates Capital and Operating Costs for a Chemical Processing Plant based on data from the currently active flowsheet.. WARNING. This software should be used for educational purposes only!.

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The data and information within the software has been obtained from a wide variety of literature sources. Jeremy Masem FIN 10/21/12 Cost of Capital paper The relationship between the method and assumptions made with respect to placing a value on a financial instrument and determining the capital cost for each of these instruments is intertwined.

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Cost Of Capital Analysis: Supernus Pharmaceuticals Company Write my research paper Include screenshots from bloomberg, factset, value line (graphs/tables) Need a good analysis I have attached screenshots of the things needed from someone elses project.

3 dynamic model, incorporating capital adjustment costs and non-competitive behavior in the product and factor markets. Analyzing the Canadian pulp and paper industry from , he.

Research paper on cost of capital
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