Lowest average rate of financing costs

Assignment Help Business Management

Reference no: EM1347131

Companies seek the lowest average rate of financing costs to capitalize the business. Common sources of financing are as follows:

- Common stock equity
- Preferred stock equity
- Bond debt

Describe how the following risks may affect these 3 sources of financing and the impact overall on weighted average cost of capital (WACC):

- Default risk

- Inflation

- Interest rate risk

- Stock and market volatility

Reference no: EM1347131

Questions Cloud

Explain how will the bank respond to the withdrawal : Explain how will the bank respond to the withdrawal. Suppose that the bank responds to insufficient reserves by reducing the amount of deposits it holds until its level of reserves satisfies its required reserve ratio.

Break-even point in boxes of candy : What is the break-even point in boxes of candy for the company under the existing situation? What selling price per box must the company charge to cover the 15% increase in the cost of the raw materials i.e., candy, and still maintain the current c..

What are the percentage rise in the price of food : What are the percentage rise in the price of food also in the price of clothing. What is the percentage rise in the CPI.

Find the increase in service level : Assume that a newspaper stand is operating under given situation; paper cost $0.4, have no salvage value, & sell for $0.80. If the salvage value is raised by$0.1,

Lowest average rate of financing costs : Describe how the risks may affect these three sources of financing and the impact overall on weighted average cost of capital - Default risk

Relations of airline flight information : The relations given below keep track of airline flight information:Flights(flno: integer, from: string, to: string, distance:integer, departs: time, arrives: time, price: real)Aircraft(aid: integer, aflame: string, cruisingrange: integer)

Powerpoint presentation on topic of costing : Task is to make a 10-12 powerpoint presentation on topic of costing. Explaining what needs to be done to project profits using the traditional income statement if sales were to increase 20%

Illustrate what are equations for is and lm curves : Illustrate what are equations for IS and LM curves. Illustrate What is equilibrium level of income and interest rate.

Explain trade off theory and pecking order theory : Compare Pecking Order Theory and Trade Off Theory and how do Pecking Order Theory and Trade Off Theory relate to optimal leverage?

User Account

All Pages