Sources of Raising Long Term Finance and Cost of Capital

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Cost of capital is very important part of corporate financing decision. Cost of capital is an inseparable part of investment decision as cost of capital is used to measure the worth of investment proposal provided by the business concern. Cost of Capital is used as a discounting rate to determining the present value of future cash flows in relation to the capital projects. Cost of capital is also known as cut off rate, target rate and required rate of return. 

As firms use different sources of finance, it is the responsibility of the finance manager to take careful decision in regard to the cost of capital because cost of capital is closely related with the value of the firm and the earning capacity of the firm.

VARIOUS SOURCES OF LONG TERM FINANCE
 (A) Ownership Capital
Equity share capital
Preference share capital
Retained earnings
(B) Borrowed capital
Debentures
Term loans
Others

CS Executive MODULE II Financial and Strategic Management paper will be conducted in multiple Choice questions (MCQ) pattern with negative marking for wrong answers. So it becomes important for CS executive students to practice online test series Financial and Strategic Management chapter Sources of Raising Long Term Finance and Cost of Capital

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Online test series for CS Executive Subject Financial And Strategic Management Chapter Sources of Raising Long Term Finance and Cost of Capital
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