Business

In computing the cost of capital, do we use the historical costs of existing debt and equity or the current costs as determined in the market?

-Why do we use the overall cost of capital for investment decisions even when only one source of capital will be used (e.g., debt)? – In computing the cost of capital, do we use the historical costs of existing debt and equity or the current costs as determined in the market? Why? – What are […]

In computing the cost of capital, do we use the historical costs of existing debt and equity or the current costs as determined in the market? Read More »

Why do we use the overall cost of capital for investment decisions even when only one source of capital will be used (e.g., debt)?

-Why do we use the overall cost of capital for investment decisions even when only one source of capital will be used (e.g., debt)? – In computing the cost of capital, do we use the historical costs of existing debt and equity or the current costs as determined in the market? Why? – What are

Why do we use the overall cost of capital for investment decisions even when only one source of capital will be used (e.g., debt)? Read More »

What type of dividend pattern for common stock is similar to the dividend payment for preferred stock?

-How is valuation of any financial asset related to future cash flows? If inflationary expectations increase, what is likely to happen to the yield to maturity on bonds in the marketplace? What is also likely to happen to the price of bonds? – What type of dividend pattern for common stock is similar to the

What type of dividend pattern for common stock is similar to the dividend payment for preferred stock? Read More »

If inflationary expectations increase, what is likely to happen to the yield to maturity on bonds in the marketplace?

-How is valuation of any financial asset related to future cash flows? If inflationary expectations increase, what is likely to happen to the yield to maturity on bonds in the marketplace? What is also likely to happen to the price of bonds? – What type of dividend pattern for common stock is similar to the

If inflationary expectations increase, what is likely to happen to the yield to maturity on bonds in the marketplace? Read More »