What are the two approaches for computing the cost of equity?
• How do you compute the cost of debt and the after-tax cost of debt?
• How do you compute the capital structure weights required for the WACC?
• What is the WACC?
• What happens if we use the WACC for the discount rate for all projects?
• What are two methods that can be used to compute the appropriate discount rate when WACC isn’t appropriate?
• How should we factor flotation costs into our analysis?