Professional Documents
Culture Documents
Cost of Capital 1
Cost of Capital 1
Financial Performance
Time value of money
Risk and Return
The Investment Decision
(Capital Budgeting)
Where we’re going...
Capital
Source Cost Structure
debt 6% 20%
preferred 10% 10%
common 16% 70%
Weighted Cost of Capital
(20% debt, 10% preferred, 70% common)