December 2012
Intermediate to advanced
250 pages
7h 30m
English
Risk, return, and investment decisions
The importance of expected cash flows
Alternatives to the NPV investment rule
This is the first chapter in the section of our book that deals with the application of the cost of capital.
The cost of capital plays a key role in investment appraisal and company valuation, through its application as the discount rate in discounted cash flow analysis. However, the existence of stock market bubbles, such as the one seen in the dot.com sector in the recent past, casts doubt on the continued applicability of the discounted cash flow approach to valuations. Some dot.coms ...
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