Finance Formulas / July 19, 2018 / Luz Tyson
Bonds form a significant portion of the financial market and are a key source of capital for the corporate world. Therefore every corporate finance course in the MBA program will introduce students to bonds at varying depth. We have provided a quick outline of what a student will need to know to understand bonds and the pricing or valuation of bonds which is the primary focus in the initial corporate finance program.
Economic profit is a measurement of opportunity cost. Opportunity cost is the value of the trade-off when a decision is made. For example, an individual may consider returning to school to get a degree but in doing so, needs to quit his current job. The individual should consider not only the cost of tuition and books, but the income he forgoes by pursing a degree. This lost opportunity to make money, or opportunity cost, is the underlying purpose of calculating economic profit.
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