CHAPTER 11: THE COST OF CAPITAL LEARNING GOALS: 1. Understand the key assumptions‚ the basic concept and the specific sources of capital associated with the cost of capital. 2. Determine the cost of long-term debt and the cost of preferred stock. 3. Calculate the cost of common stock equity and convert it into the cost of retained earnings and the cost of new issues of common stock. 4. Calculate the weighted average cost of capital (WACC) and discuss alternative weighing schemes
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demand comes from various factors. Changes in consumer preferences will change demand. Consumer preferences can be changed through advertising‚ variations in the price or availability of related products and customers’ incomes. (Stone 58) ■ What causes quantity demanded to change? Answer: Whereas a change in demand can be brought about by many different factors‚ a change in quantity demanded can be caused by only one thing: a change in product price. (Stone 59) b. On the Supply panel: ■ Show an
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evaluated. 4- Justify all answers with proper arguments and/or calculations. Be precise‚ clear and concise: ambiguous or vague statements will be considered false. Please write legibly. 5- This is a closed-book exam: however‚ one double sided sheet (8.5" x 11") of notes and a calculator are permitted for arithmetic use only. The sheet of notes must be handed over with the exam copy at the end of the exam period‚ or else your copy will not be marked. 6- NO COMMUNICATION DEVICES MAY BE WITHIN SIGHT DURING
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multimedia capabilities of your computer. DirectX provides access to the capabilities of your display and audio cards‚ which enables programs to provide realistic three-dimensional (3-D) graphics and immersive music and audio effects. DirectX is a set of low-level Application Programming Interfaces (APIs) that provides Windows programs with high-performance hardware-accelerated multimedia support. DirectX enables the program to easily determine the hardware capabilities of your computer‚ and then sets
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Cost Leadership: Any organization in order to survive in a highly competitive market should be able to achieve sustainable growth and profitability. Companies that have managed to reduce costs and understand the cost technology can obtain sustainable advantage as a cost leader. In order for any company to become a cost leader is important that the cost technology is understood and the five constituent steps are implemented and followed by the management. The five steps towards obtaining
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Latasha Thomas January 20‚ 2013 HSM 260 Jerome Anderson Exercise 10.1 Recompute fixed costs‚ variable costs‚ and the BEP. What are the variable costs? What are the fixed costs? How many meals will the WHDM program need to provide during the fiscal year to reach the BEP? How much profit will the program earn if it completes its 45‚000-meal contract with the City of Westchester? The variable cost of service is $3.93 during the fiscal year the WHDM should provide 1‚011 meals to reach their
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LOW BACK PAIN – ACUTE It is the pain felt in your lower back which may come from the spine‚ muscles‚ nerves‚ or other nearby structures. It may also be due to problems in your mid or upper back‚ the testicles or ovaries‚ or a hernia in the groin. CAUSES * If you are like most people‚ you will have at least one backache in your life. While such pain or discomfort can happen anywhere in your back‚ the most common area affected is your low back. This is because the low back supports most of
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In You Can Go Back Home Again‚ Eve Tushnet starts off her article with a scene with her and a guy friend coming back from a party‚ this scene reveals the overall theme of “its perfectly fine with going back home” . The guy friend starts of by saying that he use to live in a gentrified neighborhood but he could no longer afford. The key word in his sentence is “use to” he was ashamed for going back home but Tushnet disagrees with him by saying “Good for you” and “I think that’s great”. Later on
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of thefour possible $1 price changes. What can you conclude about the relationship between the slope of a curve and its elasticity? Explain in a nontechnical way why demand iselastic in the northwest segment of the demand curve and inelastic in the southeast segment. Product Price Quality Demanded $5 1 Vb 4 2 3 3 2 4 1 5 Answer: 1/1.5 / ¼.5= .67%/ 22%= 3.05 Ch 22 #7 1. Key Question A firm has fixed costs of $60 and variable costs as indicated in the table on the following page
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Cost of Capital Firms need to make capital investment i.e.‚ purchasing fixed assets such as factories‚ machineries‚ equipment‚ etc. After deciding what capital investments to make‚ they need to decide on the financing – sources of capital. The sources: Long-Term Debt‚ Common Stock‚ Preferred Stock and Retained Earnings. Then they need to find the cost of obtaining each source of financing today (not historical). Cost of Capital - The rate of return that a firm must earn on its investment
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