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#cfa-level-1 #corporate-finance #reading-36-cost-of-capital
Question
How do we determine what weights to use? [...]
Answer
Ideally, we want to use the proportion of each source of capital that the company would use in the project or company.

Tags
#cfa-level-1 #corporate-finance #reading-36-cost-of-capital
Question
How do we determine what weights to use? [...]
Answer
?

Tags
#cfa-level-1 #corporate-finance #reading-36-cost-of-capital
Question
How do we determine what weights to use? [...]
Answer
Ideally, we want to use the proportion of each source of capital that the company would use in the project or company.
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How do we determine what weights to use? Ideally, we want to use the proportion of each source of capital that the company would use in the project or company.

Original toplevel document

2.2. Weights of the Weighted Average
How do we determine what weights to use? Ideally, we want to use the proportion of each source of capital that the company would use in the project or company. If we assume that a company has a target capital structure and raises capital consistent with this target, we should use this target capital structure. The target capital structure is

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