Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Explain Marginal cost of capital?
The calculation of cost of capital focused when the firms total financing and its paten of financing is given and remains constant. However in practice the investment proposal may require funds to be raised from new internal external sources and thus, increasing the total funds also.
The cost of capital of the additional funds is called the marginal cost of capital. If the additional financing uses more than one source, say a combination of debt and preference share capital, then the WACC of the new financing is called the Weighted Marginal Cost of Capital (WMCC).
The WMCC for any firm depends upon several factors and therefore the calculation of WMCC is a typical exercise. The following variables may affect the marginal cost of capital of a specific source and thereby may affect the WMCC as follows:
1) The investors may perceive an increase in business risk of the firm.
2) The financial risk of the firm may also change as a result of change in composition of the capital structure.
3) The increase in business and financial risk may increase the marginal cost of capital.
The Role of Merchant Banker The issuer appoints the Merchant Banker (or Investment Banker) to undertake the issue activity. A Merchant Banker performs multiple functions during
Q. Explain the Average Rate of return Method? Average Rate of return Method (ARR): This method is as well known as Accounting Rate of Return Method. It is on the basis of accou
QUESTION 1 Part A i) Define the terms finance lease and operating lease and explain how you would distinguish between the two leases ii) When accounting for fina
Q. What do you understand by Business cycle? Business cycle: business cycle refers to the alternate expansion and contraction in the general business activity. in a period of t
a.) A bond of Rs. 1000 value carries a coupon rate of 10% and has a maturity period of 6 years. Interest is payable semi-annually. If the required rate of return is 12%, calculate
a. Calculate expected earnings per share (EPS) if the firm is perfectly hedged. EPS $
A firm has $700 in inventory, $600 in fixed assets, $600 in accounts receivables, $800 in accounts payable, and $50 in cash. What is the amount of the present assets?
1. Each student has been allocated one Australian company. This information is available in the unit website. You should check that a company is assigned to you. 2. It is your r
Q. How are LIBOR, TIBOR and EURIBOR determined? London Inter Bank Offered rate ( LIBOR) and is the rate of interest at which banks offer funds to other banks in marketable siz
Write the format to place the order. What are the risks involved in the delivery of products. Format of the order: ? Purchase order ? Acknowledgement form ? Material requisitio
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd