Do you think the firm becomes riskier or less risky

Assignment Help Accounting Basics

Reference no: EM132239986

Questions: Answer both questions:

Using United Airlines Publicly traded company

If there is no preferred stock than Cost of capital = Wd * Kd (1-t)+ Ws* Ks.

If PS then, Cost of capital = Wd * Kd (1-t)+ Ws* Ks + Wps *Kps

Wd = total long-term debt/TA, Ws = Total Equity/TA, Wps= Total PS/TA

1. If your chosen company uses its cost of capital for all projects, do you think the firm becomes riskier or less risky? (discuss).

2. Briefly compare and contrast the NPV, PI, IRR, and MIRR criteria. What are advantages and disadvantages of using each of these methods.

Reference no: EM132239986

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