How should the capital structure weights used to calculate the WACC be determined?© BrainMass Inc. brainmass.com December 24, 2021, 9:28 pm ad1c9bdddf
How should the capital structure weights used to calculate the WACC be determined?
Cost of capital is a discount rate representing the sources of funds used by the organization. It affects long-term financial decisions considerably. This will include cost of equity, debt and preferred stock. We will find the weighted average of cost of all the sources of funds.
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The solution discusses how the capital structure weights are used to calculate the WACC.