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Identify specific reasons why the cost of capital may differ with Harley Davidson relative to other companies in this industry. What does this say about Harley Davidson's past financial performances and future prospects?© BrainMass Inc. brainmass.com October 24, 2018, 6:38 pm ad1c9bdddf
This explains the reasons of differences in cost of capital
Market Rates and Cost of Capital
Please see attached file for tables.
What does a company's cost of capital represent and how is it calculated? How do market rates and the company's perceived market risk impact its cost of capital, and how does the company's debt to equity mix impact this cost of capital? Using the information provided, develop a spreadsheet to calculate weighted average cost (WAC) and marginal weighted average cost (MCC) of capital for Strident Marks?
You have developed the following table concerning the cost of capital sources for Strident Marks:
The future investment opportunities and the corresponding Internal Rate of Return (IRR) follow. As a result of operating its business operations profitably, Strident Marks has $1,000,000 to invest. Considering Strident Marks' weighted average cost of capital and MCC, rank the investment opportunities and indicate which ones would be accepted, which (if any) would be rejected and why.