Key Terms Capital structure
Capital structure
Weighted-average cost of capital
How might a financial manager try to minimize the cost of capital?
Management has calculated that the current cost of each type of financing is:
Note that the total of the proportions should add up to 100%. To find the
What would be the weighted-average cost of capital in this situation?
A firm entirely financed by common stock with no debt has a weighted-average cost of capital equal to the cost of equity.
In the weighted-average formula, the least expensive financing source will be the: