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Finance_11
Cost of Capital
Question | Answer |
---|---|
Required Rate of Return | |
Flotation Costs | |
The firm's policies regarding the sources of financing it plans to use and the particular mix in which they will be used. | Financial Policy |
A composite the individual costs of financing incurred by each capital source. | Weighted Average Cost of Capital |
Cost of Debt | |
Cost of Preferred Stock | |
Cost of Internal Equity | |
Cost of External Equity | |
The mix of long term sources of funds used by the firm. This is also called the firm's capitalization. | Capital Structure |