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The Cost of Someone Else’s Money: Understanding the Cost of Debt and Equity
Debt has an obvious cost. We borrow money, we pay interest, and eventually we give the money back. Equity is different. There is no interest bill, no repayment date and sometimes no payment at all. So why does finance insist that equity is usually the more expensive one?
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NPV: A Project Can Make Money. But Has It Made Enough?
Profit is visible. The return we gave up isn’t. NPV doesn’t simply ask whether an investment makes money. It asks whether it was worth what we gave up to make it.
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Why Does Every Business Care So Much About Working Capital?
The formula itself is simple. The decisions behind it are not. Working capital isn’t really about inventory or cash. It’s about deciding where limited resources can create the most value.