Do you want BuboFlash to help you learning these things? Or do you want to add or correct something? Click here to log in or create user.


  • Presentation
  • Question
  • Answer

Tags
#cfa-level-1 #corporate-finance #reading-36-cost-of-capital
Question
Suppose Gewicht announces that a debt-to-equity ratio of 0.7 reflects its target capital structure. What weights should Anziell use in the cost of capital calculations?
Answer
A debt-to-equity ratio of 0.7 represents a weight on debt of 0.7/1.7 = 0.4118 so that wd = 0.4118 and we = 1 − 0.4118 = 0.5882. These would be the preferred weights to use in a cost of capital calculation.

Tags
#cfa-level-1 #corporate-finance #reading-36-cost-of-capital
Question
Suppose Gewicht announces that a debt-to-equity ratio of 0.7 reflects its target capital structure. What weights should Anziell use in the cost of capital calculations?
Answer
?

Tags
#cfa-level-1 #corporate-finance #reading-36-cost-of-capital
Question
Suppose Gewicht announces that a debt-to-equity ratio of 0.7 reflects its target capital structure. What weights should Anziell use in the cost of capital calculations?
Answer
A debt-to-equity ratio of 0.7 represents a weight on debt of 0.7/1.7 = 0.4118 so that wd = 0.4118 and we = 1 − 0.4118 = 0.5882. These would be the preferred weights to use in a cost of capital calculation.

Summary

statusnot learnedmeasured difficulty37% [default]last interval [days]               
repetition number in this series0memorised on               scheduled repetition               
scheduled repetition interval               last repetition or drill

Details

No repetitions

Discussion

Do you want to join discussion? Click here to log in or create user.