Optimal capital structure and RFR: Difference between pages

Revision as of 18:33, 1 December 2018

Risk-Free Rate.

The abbreviation 'RFR' usually refers to risk-free benchmark interest rates, such as SONIA.

Also known as near risk-free rates, recognising that such rates are never entirely risk-free.

Theoretically risk free rates of investment return, for example in the Capital asset pricing model, are more often designated by 'Rf' or 'rf'.

@@ Line 1: / Line 1: @@
-''Corporate finance - capital management.''
+Risk-Free Rate.
-.
+The abbreviation 'RFR' usually refers to risk-free benchmark interest rates, such as SONIA.
-The capital structure which results in the lowest Weighted Average Cost of Capital (WACC).
+Also known as ''near'' risk-free rates, recognising that such rates are never entirely risk-free.
-.
+Theoretically risk free rates of ''investment'' return, for example in the Capital asset pricing model, are more often designated by 'Rf' or 'rf'.
-The most appropriate capital structure taking account of both:
-* The immediate cost saving benefits of a low WACC.
+==See also==
-* The potential flexibility and safety-robustness benefits of a more conservative capital structure (with a relatively lower proportion of debt finance).
+*[[Capital asset pricing model]]
+*[[RFR WG]]
+*[[Risk-free rate of return]]
+*[[Risk-free rates]]
+*[[SONIA]]
+[[Category:Corporate_financial_management]]
-== See also ==
+[[Category:Financial_products_and_markets]]
-* [[Black swan]]
-* [[Capital]]
-* [[Capital management]]
-* [[Capital structure]]
-* [[Idle cash]]
-* [[Modigliani and Miller]]
-* [[Pecking order theory]]
-* [[Tax shield]]
-* [[Weighted average cost of capital]]
-[[Category:Corporate_finance]]
-[[Category:Long_term_funding]]