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Finance: Project cost of capital with leverage.

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Discuss the concept of valuation with leverage. How could we estimate the appropriate cost of capital for a project? Explore how the financing decision of the firm can affect both the cost of capital and the set of cash flows that we discount?

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The problem deals with discussing how leverage affects the cost of capital for a project.

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QUESTION

Discuss the concept of valuation with leverage. How could we estimate the appropriate cost of capital for a project? Explore how the financing decision of the firm can affect both the cost of capital and the set of cash flows that we discount?

TUTORIAL

Leverage refers to the amount of debt that a firm includes in its capital structure. For many firms, debt is the easiest way of acquiring funds for continuing ...

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Chidi Ngene, M. Sc.
Education
  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
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