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Briefly Describe the Essential Steps in Conducting a Benefit-Cost Analysis

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Essay

Briefly describe the essential steps in conducting a benefit-cost analysis of a project.


Definitions:

Share Price

The price of a single share of a company's stock, determined by market supply and demand.

Stock Dividend

Increases the number of shares outstanding, but at a slower rate than splits. Current shareholders receive additional shares on some proportional basis. Thus, a holder of 100 shares would receive 5 additional shares at no cost if a 5% stock dividend were declared.

Shareholder's Wealth

The total value of an individual's or entity's equity in a firm, essentially reflecting the market value of their shares.

Institutional Investors

Entities such as pension funds, insurance companies, and mutual funds that invest large amounts of money in securities, real estate, and other investment assets.

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