Volume : I, Issue : IX, June - 2012

Cost of capital: an empirical case study of hindustan unilever limited

Dr. Vinod K. Ramani

Abstract :

The cost of capital is simply known as opportunity cost which used for evaluating an investment project as discount rate. The project cost of capital is the minimum required rate of return of funds committed to the project, which depends on the riskiness of its cash flows. The cost of capital is one of the most difficult and disputed topics in the financing theory. It is a concept of vital importance in the financial decision–making. It is useful as a standard for evaluating investment decisions, designing a firm’s debt policy and appraising the financial performance of top management. There does exit a methodology to calculate the cost of capital for projects. The objective method of calculating the risk–adjusted cost of capital for projects is to use the capital asset pricing model (CAPM).

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Article: Download PDF   DOI : 10.36106/ijar  

Cite This Article:

Dr. Vinod K. Ramani Cost of capital: an empirical case study of hindustan unilever limited Indian Journal of Applied Research, Vol.I, Issue.IX June 2012

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