Homework Questions Weighted Average Cost of Capital 1. What is a firm's "capital structure"? 2. What is the "weight" used in the weighted average cost of capital? 3. How do you calculate the market value of a company's common stock? 4. How do you calculate the market value of a company's debt? 5. The "cost" of equity is really the shareholders' return. 6. The "cost" of debt before taxes is simply the on the company's bonds. 7. On an after tax basis, is debt or equity a cheaper source of funds? 8. If a project has more risk than the typical project that the company usually invests in, how do we adjust for the higher risk in the capital budgeting process?