The lower the cost of capital, the better for a company. The cost of capital is the cost to use someone else’s money or investment such as the interest rate of the debt or the cost of shareholder’s investment (or equity). Which industries have the lowest cost of capital? Download the WACC data set from Connect or Additional Student Resources.

Required

1. Column D has the cost of equity, which you can think of as the cost that shareholders expect to invest in equity in companies in that industry, is average cost of equity for all industries? Which industry has the highest cost of equity Why do you think that might be?

2. Column G has the interest rate (or cost) of debt, which you can think of as the interest rate on debt. What is the average cost of debt for all industries Which industry has the highest rate of debt? Why do you think that might be?

3. Column K has the combined or weighted cost of capital. What is the average weighted cost of capital for all industries? Which industry has  highest cost of capital? Why do you think that might be