3. A company is planning to purchase a new machine to expand its production and to start anew project. There are two brand available A and B in the market. Both the machines are costing RO 70,000. The following cash inflows are expected to come for both the machines. Advise which machines will be better if the discounting rate is 10% for expansion of this project. Years Machine A Machine B A B 15,000 17,600 20,200 22,000 18,500 20,000 21,500 23,000 14,800 10,600 11,700 11,000 6.
Cost of Debt, Cost of Preferred Stock
This article deals with the estimation of the value of capital and its components. we'll find out how to estimate the value of debt, the value of preferred shares , and therefore the cost of common shares . we will also determine the way to compute the load of every cost of the capital component then they're going to estimate the general cost of capital. The cost of capital refers to the return rate that an organization gives to its investors. If an organization doesn’t provide enough return, economic process will decrease the costs of their stock and bonds to revive the balance. A firm’s long-run and short-run financial decisions are linked to every other by the assistance of the firm’s cost of capital.
Cost of Common Stock
Common stock is a type of security/instrument issued to Equity shareholders of the Company. These are commonly known as equity shares in India. It is also called ‘Common equity
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
