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  2. Equity method - Wikipedia

    en.wikipedia.org/wiki/Equity_method

    Equity method in accounting is the process of treating investments in associate companies. Equity accounting is usually applied where an investor entity holds 20–50% of the voting stock of the associate company, and therefore has significant influence on the latter's management. Under International Financial Reporting Standards/MAMAMO, equity ...

  3. Cost of equity - Wikipedia

    en.wikipedia.org/wiki/Cost_of_equity

    In finance, the cost of equity is the return (often expressed as a rate of return) a firm theoretically pays to its equity investors, i.e., shareholders, to compensate for the risk they undertake by investing their capital. Firms need to acquire capital from others to operate and grow.

  4. Cost of capital - Wikipedia

    en.wikipedia.org/wiki/Cost_of_capital

    The cost of equity is inferred by comparing the investment to other investments (comparable) with similar risk profiles. It is commonly computed using the capital asset pricing model formula: Cost of equity = Risk free rate of return + Premium expected for risk

  5. How do you calculate cost basis on investments? - AOL

    www.aol.com/finance/calculate-cost-basis...

    Average cost: This method calculates the average cost of all the shares you own and uses that average to calculate gains and losses. It’s commonly used for mutual funds. It’s commonly used for ...

  6. Weighted average cost of capital - Wikipedia

    en.wikipedia.org/wiki/Weighted_average_cost_of...

    Cost of new equity should be the adjusted cost for any underwriting fees termed flotation costs (F): K e = D 1 /P 0 (1-F) + g; where F = flotation costs, D 1 is dividends, P 0 is price of the stock, and g is the growth rate. There are 3 ways of calculating K e: Capital Asset Pricing Model; Dividend Discount Method; Bond Yield Plus Risk Premium ...

  7. Capital budgeting - Wikipedia

    en.wikipedia.org/wiki/Capital_budgeting

    Capital budgeting in corporate finance, corporate planning and accounting is an area of capital management that concerns the planning process used to determine whether an organization's long term capital investments such as new machinery, replacement of machinery, new plants, new products, and research development projects are worth the funding of cash through the firm's capitalization ...

  8. Residual income valuation - Wikipedia

    en.wikipedia.org/wiki/Residual_income_valuation

    Residual income valuation (RIV; also, residual income model and residual income method, RIM) is an approach to equity valuation that formally accounts for the cost of equity capital. Here, "residual" means in excess of any opportunity costs measured relative to the book value of shareholders' equity ; residual income (RI) is then the income ...

  9. Chart of accounts - Wikipedia

    en.wikipedia.org/wiki/Chart_of_accounts

    7.3.3 Income (Loss) From Equity Method Investments (Dr) ... 4000 Costs directly related to revenues; 5000-7999 General expense Accounts; 8000 Financial Accounts;