--%>
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 : Flexible and fixed budgets Give a brief

    Give a brief contrast between flexible and fixed budgets?

    		•
  • Q : MIS reports What are MIS reports and do

    What are MIS reports and do you made it?

    		•
  • Q : Accounting Acquisition Entry and

    Acquisition Entry and Consolidation Working Paper On January 31, 2014, Phoenix, Inc. acquired all of the outstanding common stock of Spark Corporation for $400 million cash plus 25 million shares of Phoenix' $10 par value common stock having a market value of $90 per share. Registration fees were $

    		•
  • Q : Wind turbine I have started to design a

    I have started to design a wind turbine but I am stuck now. I would like you to have a look to my design and tell me what do I have to do.

    		•
  • Q : Creative thinking & Problem solving

    General Instructions: In composing your responses to all tasks, please use full sentences and pay careful attention to spelling, grammar, punctuation, and clarity of expression. Both the content of your work and its present

    		•
  • Q : Need for valuing goodwill Need for

    Need for valuing goodwill: If the mutual rights of the partners modifies then the party which makes a sacrifice should be compensated. This basis of compensation is goodwill therefore we require calculating goodwill. Mutual rights change beneath follo

    		•
  • Q : World beta concept of a security

    Explain the world beta concept of a security.

    		•
  • Q : Cross-border acquisitions and green

    Why host country resist cross-border acquisitions, instead of the green field investments? Explain your point of view?

    		•
  • Q : What do you mean by the term turnover

    What do you mean by the term turnover?

    		•
  • Q : Computing cross-rate matrix Compute

    Compute cross-rate matrix for French franc, Japanese yen, German mark, and the British pound. Utilize most recent European term quotes in order to compute the cross-rates in order that the triangular matrix result is same as that of the portion above diagonal in Exhib

    		•