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The Real Cost of Capital
book

The Real Cost of Capital

by Tim Ogier
December 2012
Intermediate to advanced
250 pages
7h 30m
English
FT Publishing International
Content preview from The Real Cost of Capital

7

CASH FLOWS, THE DOT.COM BUBBLE, AND ALL THAT

Introduction

Risk, return, and investment decisions

The importance of expected cash flows

Alternatives to the NPV investment rule

Real option valuations

The valuation of dot.coms

Key points from the chapter

Notes

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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Publisher Resources

ISBN: 9780273748250