Financing costs to capitalize the business

Reference no: EM13747843

Companies seek the lowest average rate of financing costs to capitalize the business. Common sources of financing are as follows:

Common stock equity
Preferred stock equity
Bond debt

Explain how the following risks may affect these 3 sources of financing in international capital markets. In addition, explain how these risks may influence a company's international weighted average cost of capital (WACC):

Default risk
Inflation
Interest rate risk
Stock and market volatility

Reference no: EM13747843

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