Financial Management

What does calculating the weighed average cost of capitol tell you about Foust Company's financial strategy including the level of risk involved in the business? How could the company use WACC calculations in determining future investments?

You did not provide any specific data on the Foust Company's levels of debt or equity or any required/expected rates of return on debt and/or equity.

That said, I suggest you google WACC; Wikipedia has a pretty good explanation of the weighted cost of capital.

  1. 👍
  2. 👎
  3. 👁

Respond to this Question

First Name

Your Response

Similar Questions

  1. physics

    To determine an athlete's body fat, she is weighed first in air and then again while she's completely underwater. It is found that she weighs 690 N when weighed in air and 36.0 N when weighed underwater. What is her average

  2. MATH

    Jones Company had 100 units in beginning inventory at a total cost of $10,000.The company purchased 200 units at a total cost of $26,000. At the end of the year, Jones had 80 units in ending inventory. Compute the cost of the

  3. math

    A company produces x units of output at a total cost of 1/3 x^3 – 18x^2 + 160x. Output at which average cost is equal to marginal cost is:

  4. Business Communication

    Which of the following is an example of an external source? I. Memos sent to the employees of a company, 2. Financial reports published by a company, 3. Company databases, and 4. Industry journals.

  1. Managerial Economics

    Suppose that a firm is currently employing 10 workers, the only variable input, at a wage rate of $100. The average physical product of labor is 25, the last worker added 10 units to total output, and total fixed cost is $5,000.

  2. Corporate Finance

    Calculating Cost of Debt. Peyton's Colt Farm issued a 30-year, 7% semiannual bond 7 years ago. The bond currently sells for 94% of its face value. The company's tax rate is 35%. What is the pretax cost of debt? What is the

  3. math/economics in calculus

    The average cost of manufacturing a quantity q of a good, is defined to be a(q) = C(q)/q. The average cost per item to produce q items is given by a(q) = 0.01q2 − 0.6q + 13, for q >0. I know that the total cost is

  4. Math

    A company manufactirung snowboards has fixed costs of $200 per day and total cost of $3800 per day at a daily output of 20 boards. (A( Assuming that the total cost per day, C(x), is linearly related to the taotal out per dau,x,

  1. Financial Management

    Reading Foods is interested in calculating its weighted average cost of capital (WACC). The company’s CFO has collected the following information: • The target capital structure consists of 40 percent debt and 60 percent

  2. Microeconomics

    When average total cost is declining then: a) marginal cost must be less than average cost b) marginal cost must be greater than average cost c) average toal cost must be greater than average fixed cost d) average variable cost

  3. Accounting 1

    Match each of the following characteristics that describe financial accounting, managerial accounting, both financial and managerial accounting, or neither financial nor managerial accounting. A. Financial accounting B. Managerial

  4. Algebra 2

    a company plans to sell embroidered hats for $15. the company's financial planner estimates that the cost, y, of manufacturing the hats is a quadratic function with a y-intercept of 7,920 and a vertex of (150, 9,000). what is the

You can view more similar questions or ask a new question.