User Account

All Pages

Weighted average cost of capital formula

Assignment Help Finance Basics
Reference no: EM131710563

COST OF CAPITAL

Write at least 500 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.

  1. In the weighted average cost of capital formula, the after-tax cost of debt is used instead of the before-tax cost of debt. However, no such adjustment is made to the cost of equity. Are you surprised by this different tax handling of debt versus equity? Why or why not?
  2. If a corporation borrowed all of the money for its project at the risk-free rate, does that mean that the project's cost of capital is the risk-free rate?
  3. When calculating the weighted average cost of capital, would it matter more if book values instead of market values were used for equity instead of debt? Please explain

Be sure to document your posts with in-text citations, credible sources, and properly listed references

Reference no: EM131710563

Questions Cloud

Time premiums paid for the options : What are the intrinsic values and time premiums paid for the following options?
Discuss the use of cyber technology : Recall the four types of "discussion stoppers" that we examined in this chapter. Is that collection of "stoppers" complete? Can you think of any additional.
Factors bond rating agencies use to grade companies : Expand on this topic and discuss what factors bond rating agencies use to grade companies. Does the factor vary from industry to industry?
Discuss a kind of genetic engineering happens in nature : What is different about today's processes. What makes them potentially dangerous. What should we consider natural and what is artificial
Weighted average cost of capital formula : In the weighted average cost of capital formula, the after-tax cost of debt is used instead of the before-tax cost of debt.
Which is the first step in a typical control system : Control based on the use of pricing mechanisms and economic information is referred to as. Which of the following is the first step in a typical control system?
Discuss initiating structure and consideration : he Ohio State Studies involved research on only two dimensions - initiating structure and consideration
Resolve moral issues involving cyber technology : Are any of the four traditional ethical theories we examined-i.e., consequence-based, duty based, contract-based, and character-based-adequate to handle moral.
Yield to maturity remains constant over time : What will happen to the bond price in five years, if the bond's yield to maturity remains constant over time?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the profitability index of a project

What is the profitability index of a project that has a current cost of $100,000 and expected cash flows of $50,000 at the end of each of the next 7 years if the cost of capital is 20%?

  How good of a job does bankboston do in ensuring a diverse

How good of a job does BankBoston do in ensuring a diverse workforce in its efforts to motivate employees? Evaluate BankBoston's efforts in ensuring a diverse workforce to motivate employees

  What is the expected capital gain yield for the second

challenge question lewin skis inc. today expects to earn 4.00 per share for each of the future operating periods

  What is the 2nd year forward rate by using unbiased

One year spot rate is 6% and 2 year fixed rate is 7.5%. What is the 2nd year forward rate by using unbiased expectations theory?

  Devise a hypothetical business situation in which buying a

devise a hypothetical business situation in which buying a lookback call option on a commodity may be a sound strategy

  Calculate the profit-maximizing price for roverplus brand

Calculate the profit-maximizing price for the roverplus brand taking into account th effect of the sales of roverplus on sales of the royal dog food brand.

  In simple words the capital structure is the combination of

the capital structure decision and the cost of capitalin simple words the capital structure is the combination of debt

  Calculate the annualized stock price return of wfm

Calculate the annualized stock price return of WFM over the last 3, 5, and 10 years. Identify two competitors of WFM and contrast the ratios.

  Write a proposal of the types of information systems that

imagine that you and a business partner are considering starting a small brick amp mortar nostalgic record store. your

  Genaro needs to capture a return of 40 percent for his

1.genaro needs to capture a return of 40 percent for his one-year investment in a property. he believes that he can

  What is the forecast of the percentage of stocks

Using the exponential smoothing model you developed in part b, what is the forecast of the percentage of stocks in a typical portfolio for the second quarter.

  Customers to a sandwich shop arrive on average every six

customers to a sandwich shop arrive on average every six minutes according to a poisson distribution. the clerk can

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd