Question
Think about the importance of understanding the cost of capital to a business. Comment on why it is important, and explain why as debt increases
Think about the importance of understanding the cost of capital to a business. Comment on why it is important, and explain why as debt increases (in capital structure), eventually the WACC will increase (despite the fact debt is usually the lower cost component cost of capital). How does a company you know of, decide on its cost of capital?
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Personal Finance Turning Money into Wealth
Authors: Arthur J. Keown
8th edition
134730364, 978-0134730363
