--%>
Assignment Help - homework help

Calculation of weighted average cost of capital

Calculation of weighted average cost of capital: Under this following steps are undertaken:

1. Record amount in respect of various long term resources of firm.

2. Add up the amount of all long term resources to obtain total of the long term resources of the capital.

3. Calculate proportion of various long term resources to total of long term resources by dividing amount obtained in step 1 above by amount obtained in step 2 above.
4. Obtain information about expected returns of various long term resources or their cost of capital rate.

5. Multiply step 3 amount with step 4 figures to obtain proportionate cost of individual long term resources.

6. Add up the various costs obtained under step 5 to obtain weighted average cost of capital.

   Related Questions in Financial Accounting

  • Q : Capital budgeting analysis State some

    State some of the problems which may enter into capital budgeting analysis in case project debt is computed rather than borrowing capacity made by the project?

    		•
  • Q : Define Factitious Assets Factitious

    Factitious Assets: When any asset that has no market price which asset is termed as factitious assets. This is illustrated as expenditures of capital expenditure. The main illustration of such factitious assets is: Preliminary expenses, discount on is

    		•
  • Q : Payment method-Buy pound or investing

    When you have visited the London, you have purchased a Jaguar for £35,000, which is payable within the three months. Enough cash is there at your bank in the New York City that pays 0.35% of interest per month, compounding monthly, to pay for car. Presently, spo

    		•
  • Q : Benefits for a company to cross-list

    Explain the benefits you can think of for a company to (a) cross-list its equity shares on more than one national exchange, and, (b) to source new equity capital from foreign investors as well as domestic investors.

    		•
  • Q : Procedure of bringing new international

    Describe the procedure of bringing the new international bond issue to the market.

    		•
  • Q : Implications of fixed and flexible

    Explain “balance of payments” identity and discuss some of its implications under the fixed and flexible exchange rate regimes.

    		•
  • Q : Project Advantages-disadvantages of

    Advantages-disadvantages of internal rate of return method

    		•
  • Q : Evaluation of discount and premium

    Describe how discount and premium are evaluated whenever the assets are priced-to-market. When would law of one price prevail within the international capital markets in case foreign equity ownership restrictions are imposed?

    		•
  • Q : Accountancy Accountancy is the process

    Accountancy is the process of communicating financial information about a business entity to users such as shareholder and manager. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in s

    		•
  • Q : Deviations from purchasing power parity

    Explain about deviations from purchasing power parity for countries competitive positions within the world market.

    		•