Professor Ikram

Professor Ikram

No matter what your profession or career of choice, you ABSOLUTELY need to understand the basic tenets of finance ... your personal and professional success depends on it!

My name is Atif Ikram (Ph.D). I am a Professor of Finance at Arizona State University, and I have created this channel to promote financial literacy. My educational videos are geared towards students, young professionals and small/medium business owners who have limited to no background knowledge in corporate/personal finance.

Feel free to follow me on LinkedIn: www.linkedin.com/in/atif-ikram-654a309/

Cost of Capital: An Introduction

Cost of Capital: An Introduction

Пікірлер

  • @andreykirillov4436
    @andreykirillov4436Күн бұрын

    Don't let this setback define your trading journey. Keep working hard and striving for success.

  • @OdambsTech2020
    @OdambsTech20202 күн бұрын

    Great job

  • @sc0res24
    @sc0res242 күн бұрын

    Great video, well explained!

  • @codewicked4596
    @codewicked45963 күн бұрын

    How do you start it to look similar to that I'm currently studying npv in school

  • @jesseahernandez
    @jesseahernandez4 күн бұрын

    Keep up the great work Professor! You’ve been super consistent with uploading 👍🏼🥳

  • @bonjoursaigon
    @bonjoursaigon5 күн бұрын

    Incredible and very good explanation. Great teacher! :-)

  • @DuyguKarakanSen
    @DuyguKarakanSen5 күн бұрын

    Thank you for this! How about when the annuity actually grows? How do we introduce the growth rate to this calculation?

  • @abhishekjadhavar4277
    @abhishekjadhavar42777 күн бұрын

    at 1:57 could you please tell by which formula you arrived at 24,761.90 value?

  • @professorikram
    @professorikramКүн бұрын

    Of course. I calculated the Present Value of 320,000 as 320,000/1.05, since 5% is the discount rate. From that number I subtracted $280,000 to get $24,761.90. For a deeper understanding of this, please check out this video of mine: kzread.info/dash/bejne/e65rm6xtpafUcdI.htmlsi=BIYaNxtcUFeTVv-m And for a comprehensive playlist on DCF: kzread.info/head/PLQspRe0CBEvhnGaQi18a8I4v8DvL_HWo_&si=6ZGdl8sQpK6dpINU

  • @forheuristiclifeksh7836
    @forheuristiclifeksh78367 күн бұрын

    2:00

  • @joemills2042
    @joemills20429 күн бұрын

    Better than the rest🎉🎉

  • @BrandonPowell-th5xv
    @BrandonPowell-th5xv11 күн бұрын

    I hate knowing im missing something but the step by step instructions you give tells me ppl like you are missing from the world and we need more people like you thank you.

  • @richardgordon
    @richardgordon13 күн бұрын

    Excellent and clear explanation! Thanks!

  • @mariojavierjimenezrosario5793
    @mariojavierjimenezrosario579313 күн бұрын

    Great video !!!

  • @heatmikepark
    @heatmikepark15 күн бұрын

    For bonds paying semi annually, can we consider the discount rate as 10% and coupon rate as 80 while considering the maturity as 7 years? will that make any difference while calculating.

  • @hrm5215
    @hrm521515 күн бұрын

    really good explanation

  • @aviadrotem6927
    @aviadrotem692716 күн бұрын

    i was stuck on a problem for hours and couldn't get the right answer. 5 minutes into your video and I solved it. what an absolute legend. you earned a new subscriber!!

  • @ritafloww
    @ritafloww16 күн бұрын

    That was soooo helpful, thank you! You explain good!

  • @fio6179
    @fio617917 күн бұрын

    Great explanation

  • @user-xp7xt2bx6o
    @user-xp7xt2bx6o17 күн бұрын

    Just came across this video, great way to think about financial planning. You were my favorite prof at ASU👍👍

  • @ninajo5323
    @ninajo532318 күн бұрын

    Professor Ikram, thank you so much for the explanation. Could you share the formula you mentioned at 2:10? I think it's out of the recorded screen.

  • @professorikram
    @professorikram14 күн бұрын

    Hi! Sorry, just realized that the formula got cut off! You can view it here: cmaexamacademy.com/wp-content/uploads/2016/10/Screen-Shot-2016-10-26-at-12.36.18-AM.png

  • @jrs7541
    @jrs754119 күн бұрын

    so which is better? the present value being higher than the face value or the present value being lesser than the face value? Please explain.

  • @professorikram
    @professorikram19 күн бұрын

    Neither is better per se. If you bought the bond at face value and then the price drops because yields go up (which they HAVE over the past couple of years), then by selling the bond you’ll make a loss. However, if you hadn’t bought the bond before, and by it after the prices drop, then you’d essentially be making a higher return (or yield) than the original coupon rate (assuming you hold the bond till maturity and there is no default risk). I suppose you can say that’s “good” in that sense. So it just depends on the perspective. Does that help?

  • @jrs7541
    @jrs754118 күн бұрын

    @@professorikram thank you for taking time to answer. I really want to understand the concept. How do we get the yields or the rate of required return?

  • @professorikram
    @professorikram18 күн бұрын

    @jrs7541 great question! In this video, I treat them as given. In the REAL world, it is not Yield to Maturity that determines the price. Rather it is the price that determines the YTM. People buy and sell bonds in the bond market, and the forces of supply and demand determine the price. If a bond is offering is 3% coupon, but people want 6%, they will demand less of it. This will decrease the price up until the point that where buying at that low price will give you 6%. Now, if your question is - where does the 6% come from … well that demands on a host of factors, primarily including the rate the government is offering on its bonds (ie the “risk free” rate), the inflation rate and the default risk of the bond. That’s a separate video! 😀

  • @RealisticWorld555
    @RealisticWorld55519 күн бұрын

    thanks man really solve my issue

  • @garycurtis
    @garycurtis20 күн бұрын

    This is so helpful and explained very clearly. Thank you so much. Would this apply to 2024 Taxes, or have the brackets changed? Also do these taxes cover social Security?

  • @CeceliaLategan
    @CeceliaLategan23 күн бұрын

    Herrera Corporation has total sales of $3,110,400 and costs of $2,776,000. Depreciation is $258,000 and the tax rate is 21 percent. The firm is all-equity financed. What is the operating cash flow? Can you please explain this calculation to me

  • @wassimabdelghoffar3046
    @wassimabdelghoffar304623 күн бұрын

    does the formula to compute the value of an option change if the NPV without option is negative ? thank you

  • @professorikram
    @professorikram23 күн бұрын

    Good question. No, it does not.

  • @AlinaPulfrey
    @AlinaPulfrey25 күн бұрын

    thanks for the video, any way you can share the template?

  • @AlinaPulfrey
    @AlinaPulfrey25 күн бұрын

    thanks for the video, any way you can send me that template?

  • @trannguyenminhuc-hk1954
    @trannguyenminhuc-hk195426 күн бұрын

    Sir, how can I determine the perpetual dividend growth at 4%?

  • @malinhiles
    @malinhiles27 күн бұрын

    Incredibly helpful, thanks!

  • @bonniem1865
    @bonniem186527 күн бұрын

    Just discovered your channel, a game changer for me as struggling student ❤

  • @ninajo5323
    @ninajo532329 күн бұрын

    Professor Ikram, I really enjoy watching your videos as well! It is now my routine to come to your channel and watch parts I didn't understand in class. I appreciate your clarity in explaining and generosity in sharing the joy of knowing finance. (I cannot help but leave comments when I never upload any comments) - Undergrad business student from Korea

  • @professorikram
    @professorikram14 күн бұрын

    So kind of you! Thank you!

  • @shweta_goyal
    @shweta_goyalАй бұрын

    Thank you so much

  • @danymathew7325
    @danymathew7325Ай бұрын

    thank you

  • @justinpritchard5679
    @justinpritchard5679Ай бұрын

    Thank you, nicely done! It seems like this takes the payment at the end of each period(?). Is there an easy way to make the payment due at the beginning, please?

  • @pujadevi8444
    @pujadevi8444Ай бұрын

    hey there, not understanding why YTM = discount rate. in the previous video, we saw bond pricing dependent on market interest rate. is the annuity formula here saying that the bond offers 8% APR/coupon but the interest rate/market rate is actually 10%? in which case, why is holding this particular bond held til maturity going to equal the same value as buying a new bond from the market today?

  • @professorikram
    @professorikramАй бұрын

    Yes, this is saying that coupon (APR) is 8% but market rate (ie the rate bond investors are requiring) is 10%. That is why the value of this bond is less than its face value. I’m not sure I fully understand what you mean by “why is holding this bond till maturity equal to the same value as buying a new bond”. New bonds will likely be issued with a 10% coupon, which is what investors require. So it will have a value of $1,000. By investing in our bond that is only offering 8% coupon , investors will make some money in coupon payments and the remainder in the form of increase in bond price over time.

  • @himanshubarnwal934
    @himanshubarnwal934Ай бұрын

    can we say that YTM is equal to discounted rate ?

  • @professorikram
    @professorikramАй бұрын

    Bingo! That is exactly right! 👌

  • @himanshubarnwal934
    @himanshubarnwal934Ай бұрын

    @@professorikram no that is not right at every point.

  • @shaka582
    @shaka582Ай бұрын

    Hi, could you explain why when calculating the price in year 4, you used 6.16 (dividend 5) instead of 5.92 (dividend 4)?

  • @practicallemonch1k649
    @practicallemonch1k649Ай бұрын

    Prof, tnx for the video! There is a mistake in calculations in Problem 1: E(R) actually equals 4% + 1.38(5%) = 10.9%, not 20%.

  • @ninajo5323
    @ninajo532318 күн бұрын

    my calculation based on the formula is E(R) = 4% +1.39*(5%-4%) = 5.38%

  • @yashikaa7596
    @yashikaa7596Ай бұрын

    Your explanation always help clear any sort of doubts I have, Thank you so so much, and I really appreciate your efforts.

  • @gabesellsatx
    @gabesellsatxАй бұрын

    I tested out your calculator some parts are wrong for the if function on the married filed jointly part!

  • @professorikram
    @professorikram14 күн бұрын

    Hey! I'll check. Thanks for pointing this out.

  • @yashikaa7596
    @yashikaa7596Ай бұрын

    you explain so clearly, Thanks!!

  • @kazijawadahmed6488
    @kazijawadahmed6488Ай бұрын

    Man thanks so much. Video was fanstastic and had great details.

  • @luccamarsella322
    @luccamarsella322Ай бұрын

    thank you

  • @venkateshthevar2213
    @venkateshthevar2213Ай бұрын

    Thank you

  • @kavihemanth
    @kavihemanthАй бұрын

    This is incredible! So so looking forward to this series 🙌🏻

  • @naeemullahchauhdhry356
    @naeemullahchauhdhry356Ай бұрын

    Well done young man. Excellent initiative. Keep up the good work. 🏆👌👌👌🤲

  • @miguelcalvache706
    @miguelcalvache706Ай бұрын

    Thanks great video. However, it seems as all the projects would be good if they have at least one alternative with positive NPV, even if it has a very low probability of occurence. I mean, it is just matter of multiplicating it by a number of expanding options that surpases the negative scenarios. Lets say if the positive option has very low NPV and/or probability, I just say that I can expand the business 1000 times and at the end it will surpases the negative scenario because it doesn't expand. Also another constructive critisism is that in the case that I realized that it is a good business (optimistic scenario), why would I discount the negative scenario? I mean, if I already realized that is a good business and I want to expand it 10 times, I think the NPV will be the 3 x 10 m = 30m. Why would I substract the negative scenario that I already know is not going to happen? Thanks in advance to clarify these issues.

  • @m7madabubaker376
    @m7madabubaker376Ай бұрын

    Why when i calculate the YTM normally using YTM function the result is 13% ?

  • @zohanaslam8733
    @zohanaslam8733Ай бұрын

    you are my FAVVV TEACHERR, THANKYOUSSS

  • @midasinvesting
    @midasinvestingАй бұрын

    Very great material as always, Professor Ikram!