What would happen to the firm weighted cost of capital

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Question - Access to capital by firms occurs in different financial scenarios where each of these scenarios has its peculiarity. The management of the firms has to make decisions weighing the effect of the cost of this acquired capital and the impact it may have on profitability.

From the perspective of "senior management" of the firm, analyze the impact of the following management situations, in the scenarios in which they arise, and the decision-making of access to capital for the firm. These managerial situations are the following:

-Narrow liquidity scenario in capital markets

-Scenario of excess liquidity in capital markets.

-High interest rate scenario.

-Low interest rate scenario. Starting from the premise that they are accessing capital, analyze and present what their decision would be, for each scenario. Include the arguments on which your decisions were based and answer the following question: What would happen to the firm's weighted cost of capital in each of the scenarios?

Reference no: EM132986327

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