Weighted average cost of the last dollar of new capital, Financial Management

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Weighted average cost of the last dollar of new capital

1. The weighted average cost (WACC) of the last dollar of new capital that the firm raises, and the marginal cost rises as more and more capital is raised during a given period.

A. marginal cost of capital MCC

B. weighted average cost of capital WACC

C. average cost of capital

D. cost of preferred stock

2. Suppose a 10-year, 15% (coupon rate), monthly-pay bond has a face value of $1,000. If the required return on the bond is 12%, what is the bond's price?

A) $1174.25 B) $1023.68 C) $1169.51 D) $1088.69

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Financial Management: Weighted average cost of the last dollar of new capital

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Financial Management: Weighted average cost of the last dollar of new capital

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