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Weaknesses of WACC as Discounting Rate
WACC/Overall cost of capital has the following problems like a discounting rate as:
Note
When using market values to verify the weight/proportion in WACC, the cost of retained earnings is left out as it is already involved or reflected in the MPS and hence the market value of equity. Retained earnings are an internal origin of finance hence; whenever they are high there is low gearing, lower financial risk and hence highest MPS.
Agency Relationship between Auditors and Shareholders Shareholders appoint auditors as per the provisions of Section 159(1)-(6) of the Companies Act. The auditors are believed
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Disadvantages of Payback Period 1. Does not receive into account time value of money and supposes that a shilling obtained in the 1 st year and in the N th year have the sim
Existence of Quantity Discounts Recurrently, the firm is capable to take benefits of quantity discounts. Since these discounts affect the price per unit, they influence also
literature review?
#The following is the existing capital structure of Company XYZ Ltd. Ordinary shares at Shs.10 par 1,000,000 Retained 800,000 12% preference shares Shs.10 par 400,000 16% loan Shs.
What is the role of a broker in security transactions? How are brokers compensated? Ans: Brokers handle orders to sell or buy securities. Brokers are agents who work in place o
Paper on Estate Planning (3–5 pages) Evaluate the tools commonly used in estate planning, including trusts, life insurance, and annuities. Compare the tools as to how they would a
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