Factors that affects cost of capital in businesses How to Become an Investment Banker Definition Types Of Risk In Finance

Category: Business

Boost your business by buying Instagram followers

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These days, it is quite obvious that no business endeavor can achieve any kind of success without utilizing modern communication and mobile technologies. The most crucial technological achievement, without which businesses cannot hope to succeed in today’s market, is, of course, the Internet, and more specifically, the social media.

Enormous popularity

In the last 10 or so years, social media sites, such as Facebook and Twitter, have become so popular, that billions of people all around the world use them on a regular basis. However, in addition to these two, there is another, newer social media site, that is slowly but surely becoming as popular as they are. Of course, we are talking about Instagram.

An important part of our lives

jdhdh84In this modern world we live in, social media have become an extremely important part of our private lives, as well as our business enterprises. In order to establish a well-known business and spread its image and reputation all across the country and the world, you will have to be very active, when it comes to the social media. As a direct result of social media popularity, many businesses are constantly searching for new ways of boosting their online presence and popularity, as fast and cost-effective as possible. When it comes to Instagram, one of the best ways of instantly boosting popularity is to buy Instagram followers, as well as Instagram likes. You can learn more about this at Vibbi.com.

The importance of followers and likes

Many Instagram followers and likes are commonly seen as a clear indication of a brand’s popularity. If you have a brand that is followed by thousands upon thousands of followers, you stand a great chance of substantially increasing the number of your potential customers, as well as boosting your sales and profits. Now, you might be wondering as to how Instagram followers and likes can boost your business. This article will try to give you some answers.

Attract new customers

The more followers and likes you have, the more popular your brand will become. These numbers will serve as an indication that many people are interested in or have used your products and services, with excellent results. In turn, this will instill much confidence in those, who are still unsure about your products and services and encourage them to learn more about your business and, ultimately, become your customers or clients.

Always keep in mind that online business mostly functions exactly like in the real world. A business will continue to attract ever greater numbers of customers, as long as its services and goods prove to be efficient and worthy.

Cheap and highly-effective marketing

hjhd4With Instagram, you can easily market your business, by posting all kinds of content, from images to videos, which contain various elements of your enterprise, at a virtually no cost. Even if you decide to purchase Instagram followers and likes, never forget to keep a steady stream of quality and unique content, so as to keep your real followers engaged. If you mostly post photos and videos which are related to your business, make sure they are clear, informative and engaging.

In order for a small business to succeed, it needs a strong and active marketing campaign. However, these campaigns can cost tens or hundreds of thousands of dollars. In order to promote your endeavor, you need something that is both effective and cheap. While big companies can afford to spend millions of dollars on their campaigns, you cannot. Therefore, make sure to fully utilize Instagram and grab your opportunity to advertise your business, cheaply and effectively.

Factors that affects cost of capital in businesses

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Cost of capital refers to the amount of capital used to finance a business.

Factors that affects cost of capital in businesses (1)

The cost of capital usually depend on the mode of finance that has been used.

For instance if the business is financed solely through debt, then that is referred as cost of debt. On the other hand, if the business is financed through equity, then that is referred to as cost of equity.

In most cases, companies usually use a combination of both equity and debt to finance their business. Cost of capital usually represent the hurdle that the company or business must overcome in order to generate profit and as a result, it is usually used in capital budgeting to determine if the company or business should proceed with the projects or not.

The cost of capital sources usually varies from business to business depending on factors such as profitability, credit worthiness, operating history among many others.

This means that businesses which are still new have higher cost of capital than businesses that have already established themselves on the market.

In this article, we are going to focus on factors that affects cost of capital in businesses.

1. Current economic conditions

If current economic conditions are good, financial institutions can easily give loans at lower interest to companies.

This will in turn lower the company’s debt which is actually part of cost of capital. On the other hand, if there is a big recession in the market, many financial institutions will give loan at high interest rate meaning that the company’s debts will increase, increasing the cost of capital.

Therefore, if there is stability in the market, the cost of equity capital will increase and cost of debt will decrease.

2. Current dividend policy

Every business has its own dividend policy. The business must determine the total amount of earning that is willing to pay as dividend.

It is therefore very important to understand the concept of price earning ratio. If the price earning ratio increases, they cost of retained earnings will decrease. This is because the money that has been retained to be used to promote the business will be subtracted.

3. Financial and investment decisions

The financial and investment decision that a company makes also affects the cost of capital.Factors that affects cost of capital in businesses (2)

For instance, when a company gets new debt or share capital, it will have to inform the investor about the usage of that particular fund.

Therefore, if there is more risk to that particular investment, the creditors and shareholders will get higher reward, a factor that will affect the cost of capital.