--%>
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 : What are the main sources of growth

    What are the main sources of growth?

    		•
  • Q : Introduction of the term Risk Principle

    Give a brief introduction of the term Risk Principle?

    		•
  • Q : Define the natural price by Adam Smith

    In words of Adam Smith, who theorized that the “natural price” of a good based most directly upon the: (1) wage rate and the relative amount of labor required to produce the good. (2) greater of the value of the good &ldqu

    		•
  • Q : Activities of speculators in long turn

    The activities of speculators tend to, in the long run: (w) decrease the volatility of prices. (x) attract legal attention resulting in imprisonment. (y) increase the level and volatility of prices. (z) yield tremendous profits and raise costs to cons

    		•
  • Q : Micro economics and macro economics

    Micro economics and macro economics:Economic theory can be widely divided into micro and macroeconomics. The word micro means small and macro means big.In microeconomics, we deal

    		•
  • 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 : Why producers not be able to find

    Why producers not be able to find enough paying buyers for “public goods”?

    		•
  • Q : Theory of Purchasing Power Parity

    Question: The Theory of Purchasing Power Parity says that, in the long run, nominal exchange rates change to offset changes in relative i. _________________________ so that the purchasing power of two currencies st

    		•
  • Q : Utility with food coupons Question: In

    Question: In Vancouver the Salvation Army encourages people to make food voucher donations to panhandlers instead of simply giving them cash. You can buy a food voucher for $5 and give it to a panhandler who can use it to purchase food. The Sa

    		•
  • Q : Elucidate how Personal income tax is a

    Elucidate how Personal income tax is a major source?

    		•