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1. Define the term cost of capital 2. Why do firms calculate their weighted average cost of capital ? 3. In computing the cost of
1. Define the term cost of capital
2. Why do firms calculate their weighted average cost of capital?
3. In computing the cost of capital, which sources of capital should be considered
4. How does a firms tax rate affect its cost of capital?
5. What is the effect of the flotation costs associated with a new security issue on a firms weighted average cost of capital?
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