A companys cost of capital is a weighted average of the

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A company's cost of capital is a weighted average of the returns demanded by debt and equity investors. The weighted average is the expected rate of return investors would demand on a portfolio of all the firm's outstanding securities.

  • Exactly what sources of financing would be included in a typical company's weighted average cost of capital?
  • Which source would be most common for a typical company in today's business environment?
  • Which source would normally be most costly? Which source would cost the company the least?
  • When would the weighted average cost of capital not be appropriate for assessing a proposed project?

Reference no: EM13390286

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