Hey guys! I was wondering if anyone could help me out with these basic concept finance questions? Thanks I really appreciate it!
1. Intrl:n:lulr.'l:r:rr|Ir concepts Term Capital components Investment opportunity:r schedule IZIIpportunit'g.r oust principle Brea kpoint Target capital structure Flotation costs Marginal oost of capital Cost of capital Weighted average oust of capital Cost of debt Dl l:l l:l l:l l:l l:l l:l l:l l:l l:l Description The average oost of the next dollar of financial capital raised by a firm. The point along the firm's marginal cost of capital {MEG} curve or schedule at which the MCE increases. The costs associated with issuing new financial securities. The oost associated with a firm's borrowed financial capital. The average rate paid by a firm to secure the outstanding financial capital used to acquire the firm's assets. This ooncept maintains that the firm's retained earnings should generate a return for the firm's share holders. A firm's shareholder wealth-maximizing combination of debt. and oommon and preferred stock. A table or graph of a firm's potential invesb'nents ranked from the highest internal rate of return to the lowest. The minimum return that must be earned on a firm's investments to ensure that the firm's value does not decrease. The elements in a firm's capital structure. A firm's dust d1E retained earnings, Dr internal equity. can be estimated using a 1.I'ariet;.:r pf methods. Match the fdrmula andfer the term to its eprrespending deseriptiun. Estimatiun methud Descriptiun E aaaaaaaaaaalaaaaaa aa E diseuunting the stacks expected future cash flaws fmm dividends and capital gains. Bund-yieId-plus-risk-premium approach This methDd assumes that the |:| firm's dust of equity:r is related to its cast {11' debt. 3 Taa aaaa ia aalaaaaaa aa aha aaaa a = ra + aa tra - raaa 01' the market's n'slc-f'ree rate and the product 01' the stock's beta cuefficient and the market's risk premium. Fash Flaye' MAC 25.EI.EI.12? Q2 2.24.1 E: 20-34-2016 Aplia. All "9 he 'eserved. . g 2013 Cengage Lea 'ning exnep: a5 neteu: . All r'gh:5 resewed. Grade it Now Save 3' Contlnue