Category: corporate finance
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How to calculate NPV in Excel?
In this tutorial, we explain how to calculate the net present value (NPV) of an investment project using the NPV and XNPV functions in Excel. We’ll show how to compute the NPV without using these functions as well. If you prefer to go over this tutorial in a video format or if you’re visiting this…
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How to calculate payback period in Excel?
In this tutorial, we’ll teach you how to compute both the payback period and the discounted payback period in Excel. If you’ve arrived here from our Youtube channel, click on “Video tutorial and Excel template” section in the Contents box below to download the Excel template. If you’d like to learn more about the payback…
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Payback period
In this lesson, we’ll learn about the (discounted) payback period rule, which is a popular capital budgeting tool that helps corporate managers make investment decisions. We’ll discuss the pros and cons of this rule vis-à-vis the net present value (NPV) rule and will offer a (discounted) payback period calculator as well. What is the “payback…
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Seasoned equity offering
When a public firm (i.e., a firm whose shares are already listed on a stock exchange) sells shares to the public, this is known as a seasoned equity offering, or an SEO. This is contrast to an initial public offering (IPO) whereby a private firm (i.e., an unlisted firm) transforms into a public firm by…
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Book building
In an initial public offering (IPO), book building is the process in which underwriters (the investment banks managing the issue) elicit indications of interest from institutional investors. Underwriters, then, use the information gathered to “build the book” and establish a demand curve with the ultimate objective of setting an offer price. Book building is by…
