Explain how the capital structure of a company can help

Reference no: EM133290618

Question: Two financial analysts estimating a company's weighted average cost of capital resulted in differing results varying by two percent. One analyst used the capital asset pricing model (CAPM) and the other used the dividend growth model to estimate the cost of equity. Provide two examples explaining why the estimates may be different and if both are correct.

Would a company evaluating a project proposal accept a project if the estimated return on investment (ROI) exceeded the cost of capital by 0.01%? Explain why or why not. Your response must be specific and provide an explanation sufficiently defending your decision. Be concise.
Explain in detail two weaknesses of the discounted cash flow valuation model. Be concise.

Concisely explain how the capital structure of a company can help a company pursue a growth strategy. Answer completely.

Reference no: EM133290618

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