--%>

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 : Banking crisis on checkable deposits

    Question: Some developing countries have suffered banking crises in which depositors lost part or all of their deposits (in some countries there is no deposit insurance). This type of crisis decreases depositors' confidence in the banking syst

  • Q : Economic efficiency enhancement as

    Transaction costs are decreased and economic efficiency is enhanced by: (1) long-term wage and price controls. (2) monopolies which cooperate with central planners. (3) blacklists and yellow dog contracts. (4) bureaucratic tendencies

  • Q : Neoclassical and heterodox production

    One of my friends can't discover the answer of this question. Give solution of this question. Neoclassical production and cost theory is more realistic than and cost theory and heterodox production. Discuss.

  • Q : Gains from Exchange- Practice and

    When a world famous concert pianist is as well the world's fastest short order cook, he would most likely gain the most financially through devoting: (i) Full time to frying burgers (ii) Full time to piano practice and concerts. (iii) Half-time cooking and half-time p

  • Q : Changing rates of Appreciation and

    Elucidate the changing rates of Appreciation and Depreciation?

  • Q : Budget line and indifference curves

    Question: Monica has been considering buying a mountain bike. Last month Monica had an income of $30,000. The bike's price was $1000, the composite good price was $1, and she decided not to buy the bike.  This month Monica was surprised t

  • Q : Restriction of laissez-faire government

    A laissez-faire government is restricted to finding: (1) property rights within a simple fashion and to enforcing private contracts. (2) market prices which guarantee equitable resource allocations. (c) how resources will be allocated efficiently. (4)

  • Q : Business Economics Hello, I would like

    Hello, I would like help with my assignment.

  • Q : Productive capacity After the Spanish

    After the Spanish found the new world, they promptly began to plunder this. They imported huge amount of gold and silver to Spain. It inflow of bullion caused a rapid increase in inflation, that would have grave consequences for Spain. It is quick inflation made this

  • Q : Characteristics of Perfectly

    Perfect competition is characterized by all of the following except w) heavy advertising by individual sellers. x) homogeneous products. y) sellers are price takers. z) a horizontal demand curve for individual sellers.

    Discover Q & A

    Leading Solution Library
    Avail More Than 1449164 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads
    No hassle, Instant Access
    Start Discovering

    18,76,764

    1929662
    Asked

    3,689

    Active Tutors

    1449164

    Questions
    Answered

    Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

    Submit Assignment

    ©TutorsGlobe All rights reserved 2022-2023.