Weighted Average Cost of Capital
In class discussion:
This section trains the student to calculate the cost of financing from the firm's point of view. It assumes the student is experienced at valuing different securities from the investors point of view. With slight modifications, the valuation techniques used by investors can be used by firms issuing securities to calculate the annual costs associated with a particular type of firm financing. Once the costs of individual types of financing are known, the firms weighted average cost of capital can be calculated.
Text Readings and Assignments:
Fundamentals of Financial Management, by Eugene F. Brigham & Joel F. Houston, 11th. edition, (Thomsom - South-Western)
ISBN: 0324319800
Assigned Readings: Chapter 10 (pp. 328-349)
| Component | Chapter Sections: |
Pages |
Questions |
Self Test |
Problems |
| Topics | 10.1 - 10.10 | 328 - 349 | |||
| Assignments | 1,2,3,4,5 | 1,2 | 1,2,3,4,5,6,7,8,9,10,13,14,17,19 |
Solutions to assigned Questions and Problems are available in MS WORD format here.
Dr. Constand's Online Readings:
There are no online readings for this topic. Focus on the textbook assignments.
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or jump to another topic in this module:
Analyzing Financial Statements
Debt - Valuation and Rates of Return
Equity - Valuation and Rates of Return