--%>
Assignment Help - homework help

Describe composite cost of capital

Briefly describe composite cost of capital? And also describe the procedure to calculate composite cost of capital?

E

Expert

Verified

Composite cost of capital is also termed as weighted average cost of capital that is a calculable unit for it. It as well tells about the constituent costs of common stock, preferred stock, and debt. Each of these constituents is given weighted on the base of the associated interest rate and losses and other gains with it. It shows the cost of each other capital as alongside the average cost of total capital increased. The procedure to calculate this is primary calculating the weighted average cost of capital that is the compilation of weights of further costs summed together. The method is given as:-

WACC = WD (cost of debt) + Ws (cost of stock/RE) + WP (cost of pf. Stock)

   Related Questions in Business Economics

  • Q : Specialization in division of labor I

    I have a problem in economics on Specialization in division of labor. Please help me in the following question. Jennifer writing computer code whereas Melissa handles the business features of Econo-Software would be an illustration of specialization i

    		•
  • Q : Production function for the game

    Question Can you describe what the production function for the game looks like? (How are labour, capital and resources combined? Are there constant, increasing or decreasing returns to scale?) Answer

    Q : Good economic policy requires good

    Explain the statement: “Good economic policy requires good economic theory.”?

    		•
  • Q : Case of arbitrage while selling and

    Assume that melons sell for $5 in Brazil when moose pelts sell for $10, still into Canada melons sell for $10 as well as moose pelts sell for $5. A person who buys moose pelts within Canada to sell into Brazil would be doing: (1) speculation. (2) the “invisible

    		•
  • Q : Price charges of firm in perfectly

    Assume that the equilibrium price within a perfectly competitive industry is $15 and a firm into the industry charges $21 there. Which of the given will occur: w) the firm's profits will rise. x) The firm's revenue will rise. y) The firm will not sell

    		•
  • Q : When Economic efficiency is present

    Economic efficiency is present while the: (w) economic system is a pure socialist system. (x) resources obtainable are slightly wasted. (y) value of output is maximized, specified restricted resources. (z) utilization of resources is minimized. <

    		•
  • Q : Exchange is the necessary consequence

    Explain: “Exchange is the necessary consequence of specialization.”

    		•
  • Q : Absolute advantage in international

    One early involvement of Adam Smith to the theory of gains by international trade, although later thoroughly revised and refined through David Ricardo, was the conception of: (1) mercantilism. (2) absolute advantage. (3) comparative a

    		•
  • Q : Best alternatives while choices are made

    Opportunity costs, which are the values of the: (i) monetary costs of goods and services. (ii) best alternatives sacrificed while choices are made. (iii) minimal budgets of families upon welfare. (iv) hidden charges passed upon to consumers. (v) exorb

    		•
  • Q : Describe financial leverage and low

    Describe briefly high financial leverage, low operating leverage?

    		•