"What is wacc and why is it important to estimate a firms cost of capital" Essays and Research Papers

Sort By:
Satisfactory Essays
Good Essays
Better Essays
Powerful Essays
Best Essays
Page 3 of 50 - About 500 Essays
  • Good Essays

    Wacc

    • 1960 Words
    • 8 Pages

    CAPITAL BUDGETING Cost of Capital Evaluating Cash Flows Payback‚ discounted payback NPV IRR‚ MIRR The Cost of CapitalCost of Capital Components – Debt – Common Equity • WACC Should we focus on historical (embedded) costs or new (marginal) costs? The cost of capital is used primarily to make decisions which involve raising and investing new capital. So‚ we should focus on marginal costs. What types of long-term capital do organizations use? nLong-term debt nEquity Weighted

    Premium Net present value Internal rate of return

    • 1960 Words
    • 8 Pages
    Good Essays
  • Powerful Essays

    Quality and Cost of Debt Capital for Private Firms: Evidence from Finland Jukka Karjalainen Department of Business University of Eastern Finland April 10‚ 2010 Abstract The purpose of this paper is to examine the value relevance of the perceived audit quality in terms of who audits‚ as well as the audit outcomes in terms of the auditor’s opinion and accruals quality‚ in the pricing of debt capital for privately-held firms by examining a large sample of privately-held Finnish firms. The findings

    Premium Audit Auditor's report Financial audit

    • 13029 Words
    • 53 Pages
    Powerful Essays
  • Better Essays

    Cost Of Capital Questions

    • 646 Words
    • 4 Pages

    LECTURE 10 COST OF CAPITAL CLASS QUESTIONS 1. Roland Corporation’s last dividend (D0)‚ which was paid yesterday‚ was $2.50. The firm has a constant growth of 18.8%. The firm’s beta coefficient is 1.2. The required return on an average stock in the market is 13 percent‚ and the risk-free rate is 7 percent. Roland’s A-rated bonds are yielding 10 percent‚ its risk premium is 4% and its current stock price is $30. Which of the following values is the most reasonable estimate of Roland’s cost of retained

    Premium Dividend yield Weighted average cost of capital Stock

    • 646 Words
    • 4 Pages
    Better Essays
  • Good Essays

    Aes Cost of Capital

    • 3414 Words
    • 14 Pages

    International Capital Structure and the Cost of Capital Agenda 1 2 3 4 5 International Capital Structure and the Cost of Capital Analyzing Cost of Capital among Countries Cross Border Listing of Stocks International Asset Pricing Model (IAPM) The Financial Structure of Subsidiaries Case Analysis - AES Corporation 6 International Capital Structure and the Cost of Capital Your Logo International Capital Structure and the Cost of CapitalFirms are becoming multinational in

    Premium Financial markets Stock market Finance

    • 3414 Words
    • 14 Pages
    Good Essays
  • Good Essays

    Nike Cost of Capital

    • 677 Words
    • 3 Pages

    Executive Summary Wanting to add Nike’s share to her portfolio‚ Kimi Ford asked her new assistant‚ Joanna Cohen‚ to estimate Nike’s cost of capital. Cohen‚ later‚ came up with the cost of capital of 8.4% that was contradicted to Ford’s cost of capital of 12%. This report points out flaws of Cohen’s assumption and recalculates the WACC to obtain the most accurate cost of capital. In the cost of equity calculation‚ we will use CAPM‚ the dividend discount model (DDM)‚ and the earnings capitalization model

    Premium Weighted average cost of capital Stock market Stock

    • 677 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Nike Cost of Capital

    • 935 Words
    • 4 Pages

    1. What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? WACC- The weighted average cost of capital is the rate (percentage) that a company has to pay to its creditors and shareholders to finance assets. It is the “cost” of their worth. Companies raise money from many different types of securities and loans and the various required returns are what make up the cost of capital. WACC is used to decide if an

    Premium Weighted average cost of capital Investment Arithmetic mean

    • 935 Words
    • 4 Pages
    Satisfactory Essays
  • Good Essays

    Ameritrade – Cost of Capital Executive Summary: As a deep-discount brokerage‚ Ameritrade planned to improve its competitive position by price cutting‚ technology enhancements‚ and increased advertising in mid-1997. Before initiating the plan‚ Ameritrade needed know whether the investment returned more than it cost. We were hired to estimate the cost of capital correctly. The key question is to find suitable comparable firms to estimate Ameritrade’s asset beta‚ since it was a recently-listed firm. We thought

    Premium Rate of return Investment

    • 2466 Words
    • 10 Pages
    Good Essays
  • Good Essays

    Summary Cost of Capital

    • 2609 Words
    • 18 Pages

    The Cost of Capital 1 Background As investors desire to obtain the best/highest return on their investments in securities such as shares (Equity) and loans to companies such as debentures (Debt)‚ these returns are costs to the companies paying these Dividends (on equity) and Interest (on Debts)! It all depends on the perspective from which we chose to view the calculation (are we Earning or Paying?) Companies MUST consider the cost of financing they receive in the form of equity or debt if they

    Premium Finance Weighted average cost of capital Stock market

    • 2609 Words
    • 18 Pages
    Good Essays
  • Satisfactory Essays

    Wacc

    • 259 Words
    • 2 Pages

    1. Why do think Larry Stone wants to estimate the firm’s hurdle rate? Is it justifiable to use the firm’s weighted average cost of capital as the divisional cost of capital? Please explain. (10% weighting) Answer The hurdle rate is the rate of return a firm has to offer finance providers to induce them to buy and hold financial security. (Arnold‚2007). This is also known as cost of capital or weighted average cost of capital. The returns offered by alternative securities with the same risk

    Premium Investment Finance

    • 259 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    The Cost of Capital at AES

    • 1601 Words
    • 46 Pages

    have affected them greatly. And that’s why the company’s international exposure hurt AEs during the global economic downturn that began in late 2000. In addition‚ they did not take into consideration that as a global company with operations in countries that are hugely different from the U.S they needed a more sophisticated way to think about risk and the cost of capital around the world. besides‚‚ with AES’s international expansions‚ the model of capital budgeting was not supposed to be exported

    Premium Currency United States dollar Exchange rate

    • 1601 Words
    • 46 Pages
    Good Essays
Page 1 2 3 4 5 6 7 8 9 50