In this article we will discuss about the concept and methods for time preference of money along with its applications. Concept and Methods for Time Preference of Money: We prefer today's money to that of tomorrow due to our pressing needs for consumption and cost of abstinence from the present consumption, fall in the value of money of tomorrow due [...]
Lending of money is for a return in the form of interest. The rates of interest vary with the purpose and maturity and a host of other factors. Thus, advances made by banks and financial institutions are at varying rates of interest and Reserve Bank has allowed freedom to banks to fix their prime lending rates, which are the rates [...]
The following points highlight the three main types of fundamental valuation of securities in a company. The types are:- 1. Valuation of Convertible Bonds/Debentures 2. Valuation of 'Rights' 3. Valuation of Bonds. Type # 1. Valuation of Convertible Bonds/Debentures: Convertibles enjoy the benefits of both debt (initially) and equity (later). The terms of conversion will decide the pricing of these [...]