investing

1. What does calculating the weighted average cost of capital (WACC) tell you about a company's financial strategy including the level of risk involved in the business?

2. How could the company use WACC calculations in determining future investment?

  1. 👍
  2. 👎
  3. 👁
  1. Check this site.

    http://www.investopedia.com/terms/w/wacc.asp

    1. 👍
    2. 👎
    👤
    Ms. Sue
  2. Thank you Ms. Sue.

    1. 👍
    2. 👎
  3. You're welcome, JM.

    1. 👍
    2. 👎
    👤
    Ms. Sue

Respond to this Question

First Name

Your Response

Similar Questions

  1. Business Finance

    Jungle, Inc., has a target debt−equity ratio of 0.72. Its WACC is 11 percent, and the tax rate is 31 percent. (Do not include the percent signs (%). Round your answers to 2 decimal places. (e.g., 32.16)) Required: (a) If

  2. Corporate Finance

    1. Langston Labs has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and Langston evaluates low-risk projects with a WACC of 8%, average projects at

  3. fin 3030

    2. A new common stock issue paid a $1.50 dividend last year. The par value of the stock is $25, and earnings per share have grown at a rate of 3% per year. This growth rate is expected to continue into the foreseeable future. The

  4. Business finance

    Question No: 1 The overall (weighted average) cost of capital is composed of a weighted average of : a)The cost of common equity and the cost of debt b)The cost of common equity and the cost of preferred stock c)The cost of

  1. Finance

    Spam Corp. is financed entirely by common stock and has a beta of 1.0. The firm is expected to generate a level, perpetual stream of earnings and dividends. The stock has a price-earnings ratio of 8 and a cost of equity of 12.5%.

  2. Investment management

    In this assignment, you will apply the concepts of company valuation that you have just learned to determine whether company XYZ is overvalued. We are currently at the end of year "t". You performed a thorough financial analysis

  3. accounting

    The overall (weighted average) cost of capital is composed of a weighted average of : a)The cost of common equity and the cost of debt b)The cost of common equity and the cost of preferred stock c)The cost of preferred stock and

  4. finance

    1. A bond has a $1,000 par value (face value) and a contract or coupon interior rate of 8%. A new issue would have a flotation cost of 5% of the market value. The bonds mature in 10 years. The firm’s average tax rate is 28% and

  1. Accounting

    Solex Company produces a high-quality insulation material that passes through two production processes. Data for June for the first process follow: Required: 1. Assume that the company uses the weighted-average method of

  2. Accounting please help in homework

    The overall (weighted average) cost of capital is composed of a weighted average of : a)The cost of common equity and the cost of debt b)The cost of common equity and the cost of preferred stock c)The cost of preferred stock and

  3. Corporate Finance

    Taxes and WACC. Rainbow in the Dark Manufacturing has a target debt-equity ratio of .65. Its cost of equity is 13%, and its cost of debt is 8%. If the tax rate is 35%, what is the company's WACC?

  4. Financial Management

    Vang Enterprises, which is debt-free and finances only with equity from retained earnings, is considering 7 equal sized capital budgeting projects. Its CFO hired you to assist in deciding whether none, some, or all of the projects

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