The Cost of Capital(英文版)(ppt 24页)

The Cost of Capital(英文版)目录：
1、Geothermal’s Cost of Capital
2、Weighted Average Cost of Capital (WACC)
3、Capital Structure
4、Required Rates of Return
5、Big Oil’s WACC                 
6、Interpreting WACC
7、Flotation Costs

 

The Cost of Capital(英文版)内容提要：
Cost of Capital：
Example
Geothermal Inc. has the following structure.  Given that geothermal pays 8% for debt and 14% for equity, what is the Company Cost of Capital?
……

Three Steps to Calculating Cost of Capital
1. Calculate the value of each security as a proportion of the firm’s market value.
2. Determine the required rate of return on each security.
3. Calculate a weighted average of these required returns.
……

WACC：
Example - Executive Fruit has issued debt, preferred stock and common stock.  The market value of these securities are $4mil, $2mil, and $6mil, respectively.  The required returns are 6%, 12%, and 18%, respectively.
Q: Determine the WACC for Executive Fruit, Inc.

 

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