PQ Awards Nominations

Please help us to win one of the PQ Magazine awards and send in the voting form >>
You can nominate us in any or all of the following categories: Online College of the Year, Study Resource of the Year, Private Sector Lecturer of the Year, and Accountancy Personality of the Year.

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Concept for Discount rate

This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
September 10, 2021 at 7:21 am #635225
James124
Participant
- Topics: 159
- Replies: 136
In Kaplan, it is stated that cost of capital, discount rate, required rate of return every term means same thing.
Conceptually, I am only to understand cost of capital ans rate of return are same.
For lender rate of return is interest he demands for giving money. For borrower, the same rate is cost of capital he borrowed.
How is discount rate is similar term to cost of capital or rate of return? I am unable to get it conceptually tutor.
September 10, 2021 at 8:13 am #635250
John Moffat
Keymaster
- Topics: 56
- Replies: 51582
What Kaplan states is correct. If the lender requires a return of 10% then the company has to pay them 10%.
However this is not relevant for Paper MA. It is in Paper FM that this is examined in detail and is therefore explained in detail in our free Paper FM lectures.
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.