Content preview from Fundamentals of Financial Management, Third Edition
- What is cost of capital?
- It is the weighted average of cost of different forms of capital - equity share capital, preference share capital and debt.
- How is cost of debt calculated?
- Interest x (1 - tax rate)
- How do you calculate the cost of new debt which includes floatation cost?
- How do you calculate the cost of preference share capital?
Kp = DP/P
- What are the basis for calculating the cost of equity share capital?
- Historical rate of return
- Current price of shares considering also the expected growth in dividend
- Security market line comprising both the systematic and unsystematic risk
- Cost of debt
- How do you ...
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ISBN: 9789332508170