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What reflects the impact of the project on the firm's risk and is measured by the impact of the project on the variability of the firm's profit?
Corporate risk
A method of valuing a business that involves the application of capital budgeting procedures to an entire firm rather than to a single project.
Discounted cash flow (DCF) method
Those costs occurring when a company issues a new security, including fees to an investment banker and legal fees.
Flotation cost
What reflects the effects of a project on the risk of stockholders, assuming they hold diversified portfolios. Market risk is measured by the project’s effect on the firm’s beta coefficient ?
Market risk
A cash flow that a firm must forgo to accept a project. For example, if the project requires the use of a building that could otherwise be sold, the market value of the building is an opportunity cost of the project.
Opportunity cost
Arrangements used to finance mainly large capital projects. The most important aspect of project financing is that the lenders and lessors do not have recourse against the sponsors; they must be repaid from the project’s cash flows and the equity cushion provided by the sponsors.
Project financing
What is the cost of capital appropriate for a given project, given the risk of that project ?
Risk-adjusted costs of capital
The relative amount of debt, preferred stock, and common equity that the firm desires.
Target capital structure
Debt, preferred stock, and common equity. Each weighting factor is the proportion of that type of capital in the optimal, or target, capital structure.
Weighted average cost of capital
Gradual transfer of fixed assets to products created over a period of time in order to provide financial statements.
Depreciation
Series of equal cash payments that occur at regular intervals.
Annuity
Presence of prerequisites "for obtaining a loan, the ability to repay it in full and in a specified period.
Credit
Long-term lease of machinery, equipment, equipment, vehicles on the return of urgency and payment and on the basis of a contract between the landlord and the tenant, which provides for their subsequent redemption by the tenant.
Leasing
Partial or complete tax exemption
Tax benefits
A multi-year agreement between two firms that provides for one firm to transfer to another firm its right to use a particular trademark, technology, know-how within a specified market.
Franchising
Amount of a loan that is repaid for a certain percentage.
Borrowed capital
Exchange of securities of one issue with securities of another issue of the same issuer.
Securities conversion
Actions of a corporation as a legal entity in the distribution of net income between shareholders and the corporation.
Dividend policy
One of the segments of the financial market, a special sphere of financial relations, related to the process and ensuring the circulation of borrowed capital.
The capital market
A loan that is made available in merchandise by sellers to buyers in the form of deferred payment for goods sold.
Commercial Loan