Problem
Companies borrow from various institutions in the capital market to finance their businesses for short and long term periods. The concept of a weighted cost of capital may be be new to some of you, but if you were a financial manager why would the weighted cost of capital be important to you as you examine the cost of borrowing on behalf of your firm? Why or why not?
In a similar way what would be your focus as it pertains to the financial market and interest rates it you were to sell bonds to raise capital for your firm? Why or why not?