Economics, Econometrics and Finance
8 years ago

Financial firms face new challenges in pricing and performance optimization.

British Actuarial Journal
The Cost of Capital for Financial Firms
C. J. Exley, Andrew Smith

Paper Summary

The cost of capital is the return needed by those who provide money to businesses. This helps set profit targets for firms to satisfy investors. The paper discusses this concept and applies it to banking and insurance companies. It shows how this affects product prices, performance evaluation, and financial decisions.

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