Question
1. Why do we use market interest rate instead of historical interest rates in calculating a firm's cost of debt? why do we prefer to
1. Why do we use market interest rate instead of historical interest rates in calculating a firm's cost of debt? why do we prefer to use market values instead of book values ?
2. Why do we assume business and financial risk are unchanged when evaluating the cost of capital? discuss the implications of these assumptions on the acceptance and financing of new projects.
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Financial Management For Public Health And Not For Profit Organizations
Authors: Steven A. Finkler
2nd Edition
0131471988, 978-0131471986
