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Ques)Explain what is meant by the company’s weighted average cost of capital.
Step by step
Solved in 2 steps
- Explain what is the Weighted Average Cost of Capital (WACC) and why is it important for a company to understand it's WACC.1.Describe the components included in weighted average cost of capital. How do you determine a "good" cost of capital? Identify the factors that may affect a company’s cost of capital. lessDescribe two factors to be considered when calculating the weighted average cost of capital (WACC) for a company.
- Essay: 1. What are the components of a working capital? Is it important? Why or why not? 2. What is the effect of the Current Ratio to the company’s operation?Describe the process of calculating the Company Cost of Capital?Why is the WACC (weighted average cost of capital) important? When is it useful to a company?
- When is WACC (weighted average cost of capital) commonly used?. How are the component costs combined to forma weighted average cost of capital (WACC),and why is it necessary to use the WACC in capitalbudgeting?3. Explain the relationship between the weighted average cost of capital (WACC), the maximization of firm value, and financial decision making.
- What is the weighted average cost of capital (WACC), and how is it calculated? Kindly answer ASAPWhen placed in the context of looking at a company's capital structure, are there different forumulas you can use to find Weighted Average Cost of Capital and does the company being levered or unlevered make a difference?Describe how the following factors affect external capitalrequirements: (1) payout ratio, (2) capital intensity, (3) profitmargin.