A Theory of the Firm's Cost of Capital

Author: Ramesh K S Rao & Eric C Stevens
Price: $93.75


The cost of capital concept has myriad applications in business decision-making. The standard methodology for deriving cost of capital estimates is based on the seminal Modigliani-Miller analyses. This book generalizes this framework to include non-debt tax shields (e.g., depreciation), interactions between the borrowing rate and tax shields, and default considerations. It develops several new results and shows how better cost of capital and marginal tax rate estimates can be generated. The book's unified cost of capital theory is discussed with comprehensive numerical examples and graphical illustrations. This book will be of interest to corporate managers, academics, investment bankers, governmental agencies, and private companies that generate cost of capital estimates for public consumption.

A discerning practitioner should be able to use the insights from this book to analyze corporate financing decisions. -- Prafulla Nabar, Head of Enterprise Valuation Group, Lehman Brothers, USA

A very useful contribution for both practitioners and academics. -- Franklin Allen, The Wharton School of the University of Pennsylvania, USA

This book provides a very focused and thorough analysis of the firm's cost of capital. -- Dan Galai, The Hebrew University of Jerusalem, Israel

Type of Product






Special Note - Please Login/Register to TaxConnections as this provides you with a Download Option For eBook purchases.
Contact Us Today