Cost of Capital

Related BrainMass Solutions

• Explain the Companies Cost of Capital and How it is Calculated

  WACC (Weighted average cost of capital), on the other hand, is the cost of all the capital. It is the total cost of capital as opposed to marginal cost of capital.

• Calculation of cost of capital, marginal cost, WACC

  279026 Explain calculation of cost of capital, marginal cost, WACC. Impact of market risk.

• Starbucks WACC for the attached data for years 2009, 2010.

  Marginal cost of capital takes only new funds raised while calculating the cost of capital. Cost of raising additional funds is estimated and it is multiplied with the proportional cost of capital.

• Company's Cost of Capital

  How is the cost of capital derived?

• Solving for unknowns

  turnover: 3 Rate on return on invested capital: 15% Cost of capital: ____% Economic profit: $320,000 Economic profit = Income - Cost of capital X invested capital 320,000 = 2,400,000 - Cost of capital X 16,000,000 Cost of capital = 13%

• Determining required rate of return in capital budgeting

  Cost of capital (WACC)= (Cost of Equity x Proportion of equity from capital)+ (Cost of debt x Proportion of debt from capital)+ (Cost of Preference share x Proportion of preference share from capital).

• WACC

  Cost of capital (WACC)= (Cost of Equity x Proportion of equity from capital)+ (Cost of debt x Proportion of debt from capital)+ (Cost of Preference share x Proportion of preference share from capital).

• Marginal cost of capital & weighted average cost of capital

  Cost of capital (WACC)= (Cost of Equity x Proportion of equity from capital)+ (Cost of debt x Proportion of debt from capital)+ (Cost of Preference share x Proportion of preference share from capital).

• cost of capital,its components

  The answer contains the reason for using opportunity cost as the cost of capital, components of cost of capital, rationale behind measuring cost of capital on after tax basis.

• Cost of Capital - for Kraft Foods organization (KFT)

  Clearly indicate what data you used and show how you calculated the unlevered cost of capital. ---5. Why might you want to know a company's unlevered cost of capital? COST OF CAPITAL - for Kraft Foods organization (KFT) 1.