Question
1. Do we focus on after-tax cost of debt or before-tax cost of debt? Do we focus on new costs of debt or historical costs
1. Do we focus on after-tax cost of debt or before-tax cost of debt? Do we focus on new costs of debt or historical costs of debt? Why?
2. How to adjust component cost of debt, preferred stock, common stock for flotation costs?
3. When we calculate WACC, do we consider such current liabilities as accounts payable, accruals, and deferred taxes as sources of funding? Why?
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Applied Quantitative Finance
Authors: Härdle
3rd Edition
3662544857, 978-3662544853
