Cost of capital isthe company’s cost of capital multiplied by the amount of the investment.
举一反三
- A capital investment’s internal rate of return( ). A: Must exceed the cost of capital in order for the firm to accept the investment. B: C: Statements c and d are correct. D: Changes when the cost of capital changes. E: Is similar to the yield to maturity on a bon F: Is equal to the annual net cash flows divided by one half of the project’s cost when the cash flows are an annuity.
- A capital investment’s internal rate of return ( ) A: Changes when the cost of capital changes. B: Must exceed the cost of capital in order for the firm to accept the investment. C: Statements c and d are correct. D: Is similar to the yield to maturity on a bond. E: Is equal to the annual net cash flows divided by one half of the project’s cost when the cash flows are an annuity.
- The average of a firm's cost of equity and after tax cost of debt that is weighted based on the firm's capital structure is called the: A: reward to risk ratio B: weighted capital gains rate C: structured cost of capital D: weighted average cost of capital
- Which are the advantages of issuing common stocks to raise money？ A: Increase the company's financing ability B: Reduce financial risk of the company C: Reduce the capital cost of the company D: No restrictions on the use of capital
- Company A’s capital employed and its adjusted profit is $800m and $500m respectively. Its target capital structure is 75% equity 25% debt. The cost of equity is 18% and pre-tax cost of debt is 12%. What is the value of EVA using Economic Value Added approach?