Calculation of weighted average cost of capital, Financial Management

Assignment Help:

Calculation of Weighted Average Cost of Capital

The calculation of weighted cost of capital involves the following steps:

(i) Calculate the cost of each source of funds.

(ii) Allocate weights to specific costs

(iii)Multiply the cost of every of the sources by the assigned weights

(iv) Divide the whole weighted cost by the total weights

Formula:-

Kw = ? XW / ? W

Kw = Weighted Average Cost of Capital

X = Cost of specific source of finance

W = Weight of specific source of finance.


Related Discussions:- Calculation of weighted average cost of capital

Registered and unregistered bonds, On the basis of transferability, d...

On the basis of transferability, debentures can be classified as registered and unregistered debentures. Unregistered debentures (or bearer debentures) are freely

Financial Analysis of Carrefour & Tesco Supermarkets, comparative analysis ...

comparative analysis on these two food retailing giants

Find out the future value of annuity at the end of five year, Goral is requ...

Goral is required to pay five equal annual payments of Rs. 10,000 each in his deposit account that pays 10% interest per year. Find out the future value of annuity at the end of fi

What do you mean by time value of money, Q. What do you mean by Time value ...

Q. What do you mean by Time value of money ? The concept of TVM refers to the fact that the money received today is different in its worth from the money receivable at some oth

Operating cycle, discuss the applicability of operating cycle in poultry in...

discuss the applicability of operating cycle in poultry industry

Coupon curve duration, Market price is used for determining the dura...

Market price is used for determining the duration of a mortgage-backed security in the coupon curve duration. This approach to calculate the duration of mortgage-bac

Explain the bird in the hand theory of cash dividends, Explain the bird in ...

Explain the bird in the hand theory of cash dividends. The bird in the hand dividends theory states that dividends received now are better as compared to a promise of future divi

Aims of financial services authority, Aims of FSA The aim of FSA is to ...

Aims of FSA The aim of FSA is to promote efficient, orderly and fair markets, and to help retail consumers to get a fair deal. In fact, FSA has set out its aims under three bro

Asset-backed and mortgage-backed securities, When financial assets or bonds...

When financial assets or bonds are pooled together and offered to the investors for receiving the inflow of funds from these underlying assets, they are termed as asset

Capital budget relate to pro forma financial statements, Explain how the ca...

Explain how the cash budget and the capital budget relate to pro forma financial statements. The cash budget demonstrates the projected flow of cash in and out of the firm fo

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd