📘 Core concepts
- 1Compound interest accumulates wealth; discounting brings future to present.
- 2Cost of capital: minimum return to compensate suppliers of capital.
- 3WACC: weighted average of after-tax cost of debt, preference, equity.
- 4CAPM for cost of equity: Rf + β(Rm − Rf).
- 5Marginal cost of capital relevant for new investment decisions.
Want more depth on concept?
Make it click