Skip to content
what is liabilities to asset ratio

What Is Liabilities To Asset Ratio?

By Andrew Stotz

The liability to asset ratio is also known as the debt to asset ratio. It shows the percentage of assets that are being funded by debt.

Read More
what is weighted average cost of capital

What is Weighted Average Cost of Capital (WACC)?

By Andrew Stotz

The WACC is the average cost of raising capital from all sources, including equity, common shares, preferred shares, and debt. It represents the required return firms should earn to satisfy their investors.

Read More
what is present value

What Is Present Value?

By Andrew Stotz

The present value is the current value of future cash flows at a specific rate of return. The present value indicates that an amount of money today has a higher value than that same amount in the future.

Read More
what is cost of equity

What Is Cost of Equity?

By Andrew Stotz

To compensate for the risks that shareholders take, firms pay them in return. The theoretical return the firm pays its shareholders is known as the cost of equity. In other words, the cost of equity is the rate of returns a firm pays to its shareholders.

Read More
what is inflation

What Is Inflation?

By Andrew Stotz

Inflation is when the prices of goods and services increase over time. While the prices of goods and services increase, the purchasing power or value of money decreases.

Read More
what is future value

What Is Future Value?

By Andrew Stotz

Future value is the value of a current asset at a specific time in the future calculated based on an assumed growth rate.

Read More
what is capital asset pricing model

What is the Capital Asset Pricing Model (CAPM)?

By Andrew Stotz

CAPM is a measure used by investors to evaluate the expected return on investments. It allows investors to diversify their investments to achieve the desired return based on the risk of each investment.

Read More
what is time value of money

What Is Time Value of Money?

By Andrew Stotz

Time value of money describes how the sum of money that you hold currently is worth more than the equivalent sum in the future.

Read More
what is equity risk premium

What Is Equity Risk Premium?

By Andrew Stotz

Equity-risk premium is the difference between expected returns from the stock market and the expected returns from risk-free investments.

Read More
what is risk-free rate

What Is Risk-Free Rate?

By Andrew Stotz

The risk-free rate is the ‘theoretical’ minimum rate of return on investments with no risk.

Read More