What are Capital Markets? Capital markets are markets where people‚ companies‚ and governments with more funds than they need (because they save some of their income) transfer those funds to people‚ companies‚ or governments who have a shortage of funds (because they spend more than their income). Stock and bond markets are two major capital markets. Capital markets promote economic efficiency by channeling money from those who do not have an immediate productive use for it to those who do. 1.
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Chapter 8 The Cost of Capital 236 CHAPTER 8—THE COST OF CAPITAL TRUE/FALSE 1. Capital refers to items on the right-hand side of a firm’s balance sheet. 2. The component costs of capital are market-determined variables in as much as they are based on investors’ required returns. 3. The cost of debt is equal to one minus the marginal tax rate multiplied by the coupon rate on outstanding debt. 4. The cost of issuing preferred stock by a corporation must be adjusted to an after-tax
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innovation and reliability in its branding is Intel. Because of the fears consumers have‚ when things go wrong with technology products they react disproportionately. Take the well documented example of Intel‚ when initial faults discovered by customers after the launch of the Pentium chip by Intel were potentially devastating‚and the company was receiving up to 10‚000 calls a day from dissatisfied or unhappy customers. Good crisis management saved the day‚ and Intel regained their position of trust and
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forms of financing are not cost equivalent in the presence of capital market imperfections‚ despite both being credit forms. The case presents two opposing anecdotes: one about a trading company that bought its office and profited hugely from this decision as the market and capital values move upwards‚ but then faced huge losses as the market declined; and another from a comparable trading company leasing office space‚ and applying its capital to grow the trading business without diversion. The Company
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A company’s capital structure is a very important component of a company’s financial health and longevity. The capital structure should maximize total net profit and overall shareholder wealth. An optimal proportion of equity and debt as a company’s capital structure is an indication of a well-managed and successful company and should be a goal for most corporations. Beverly Flax and Rick Rosenfield founded California Pizza Kitchen (CPK) in 1985 in Beverly Hills‚ California. It is a casual dining
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Cost of Capital Definition: cost of capital is the rate of return that a company must earn on its project investments to maintain its market value and attract funds. The cost of capital to a company is the minimum rate of return that is must earn on its investments in order to satisfy the various categories of investors‚ who have made investments in the form of shares ‚ debentures and loans. The cost of capital in operational terms refers to the discount rate that would be used in determining the
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Capital One Financial Corporation 1. How is Capital One’s use of IT different from other mass customization strategies? Capital One uses IT through its information-based strategy (IBS) to “record‚ organize‚ and analyze data on the characteristics and behaviors of their customers‚” as stated by CEO Richard Fairbank. Their philosophy was to exploit information by constructing scientific models that could be used to both assess the creditworthiness of potential cardholders through
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1. Characteristics of the four market structures. [monopoly‚ oligopoly‚ monopolistic competition‚ & perfect competition] 2. Know the four types of monopolies. [Government‚ Natural‚ Technology‚ and Geographic] Market Structure Vocabulary I. Perfect Competition – has a very large number of sellers (hundreds or thousands) of the same product (any agriculture or fishery product). They are all
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Cultural capital exists in three states‚ each of which requires economical capital as the primary impetus for accumulation . First‚ the embodied state of cultural capital includes the individual’s investment in self-improvement such as cultivating hobbies and interests. The most difficult form of capital to transfer is embodied capital‚ which requires time and merit. Second‚ the objectified state is the appreciation of cultural goods and materials such as books and instruments by those who hold the
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Maureen Pratiwi Putri Irwinsyah 1501207144 – 04PCG Academic Writing – Thesis Statement Jakarta as Capital City is A Capital Negative Is this great Jakarta feels like a city that is enjoyable for us‚ Jakarta people‚ to be the place to live on? From the opinion of Indonesia’s Trade Ministry website (http://www.tradexpoindonesia.com/jakarta-facts‚ 2013) Jakarta is the most populous city in Indonesia‚ in South Asia‚ and even the thirteenth most populated city in the world. As a city itself‚
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