The weights used in calculating the weighted average cost of capital should be based on ________. a book values b estimated future values c market values

Q: Select all of the following that managers can use to evaluate capital invesments. (Select all that…

A: Evaluation techniques of capital investment are performed to arrive at a decision of investment in…

Q: Why might the weights of capital be different depending on whether book values,market values, or…

A: The weights of the capital should be different for book values of a equity, market value of a…

Q: Explain how a change in interest rates in the economy would beexpected to affect each component of…

A: Introduction:   The interest rate is the percentage value of the total borrowed amount that a…

Q: In calculation of weighted average cost of capital, is trades payable included?

A: Trade payable- Amount that is payable by a firm  for goods purchased or services availed and it…

Q: Describe the logic underlying the use of target weights to calculate the weighted average cost of…

A: WACC is the method to calculate the cost of capital of a company by giving weightage to the sources…

Q: Which of the following is a capital budgeting method? A. net present value B. inventory turnover…

A: Please find the answer to the above question below:

Q: Provide a brief overview of capital structure effects.  Be sure to identify the ways in which…

A: Answer: The effect of value of capital structure depends on the effect on the debt on weighted…

Q: Why are market-based weights used instead of book-value-based weights when computing the weighted…

A: Market value is that present worth of the firm or any resource in the market on which it tends to be…

Q: Define weighted average cost of capital (WACC)

A: Weighted average cost of capital (WACC) It is the sum an organization is relied upon to pay to all…

Q: How is the weight in the weighted average cost of capital calculated

A: WACC = (Weight of Common stock * Cost of common stock) + (Weight of preferred stock * Cost of…

Q: The market values and​ after-tax costs of various sources of capital used by Ridge Tool are shown in…

A: For a given capital structure, WACC(weighted average cost of capital) is the figure that reveals the…

Q: Weighted average cost of capital is the combined cost of capital using a capital mix. The capital…

A: The Answer

Q: Calculate RETURNED ON INVESTED CAPITAL by referring the pictures of Financial Position and Statement…

A: Please see the next step for the solution

Q: How do we get the weighted average cost of capital if not given in the question?

A:

Q: In computing the cost of capital, do we use the historical costs of existing debt and equity or the…

A: WACC is cost incurred by entity to finance its capital structure. It is sum of weighted individual…

Q: A high capital gearing ratio indicates [A] under capitalization [B] over capitalization [C]…

A: Capital gearing Ratio is the term which means the amount of debt the company has relative to its…

Q: hat is the role of the WACC (weighted average cost of capital) in valuation? How will WACC (weighted…

A: Weighted Average Cost of Capital (WACC): The Weighted Average Cost of Capital (WACC) is the weighted…

Q: The weights used in calculating the weighted average cost of capital should be based on ___

A: The Answer:

Q: Which of the following-would be consistent with a more aggressive approach to financing working…

A: Working capital refers to the short-term capital required by a company to meet its immediate…

Q: Determining optimum capital structure is a. An investment decision b. A financing decision c. A…

A: An investment decision is related to the management of the firm's funds into investment in assets.…

Q: The values ​​of the future net incomes discounted by the cost of capital are called question Select…

A: Future value/future cash flow discounted by the COC gives Present value/ PV of cash flow.

Q: What is the weighted average cost of capital?

A: The formula to compute weighted average cost of capital as follows:

Q: Does weighted average cost of capital is similar to Cost of Capital?

A: Cost of capital refers to the return expected by the company for making investments in projects or…

Q: a. What is STP's unlevered cost of capital? b. What is STP's after-tax debt cost of capital? c. What…

A: a) Total common stock value = 32 * 12 = 384 Total debt = 100 Total value = 384 + 100 = 484 Unlevered…

Q: In capital budgeting analysis, when computing the weighted average cost of capital, the CAPM…

A: CAPM model is used determine the cost in capital budgeting decisions.

Q: What is the nominal return associated with an investment in capital, and why?

A: Nominal Return is the amount of money generated by an investment.

Q: 3. Which of the following are acceptable criteria for determining the weights in the weighted…

A: WACC is required for estimating the cost of acquiring the funds to do the business.

Q: Which of the following are acceptable criteria for determining the weights in the weighted average…

A: The weighted average cost of capital (WACC) or cost of capital helps in assessing the returns of the…

Q: When is WACC (weighted average cost of capital)  commonly used

A: The weighted average cost of capital represents the rate that has been expected to pay to the…

Q: The Capital Asset Pricing Model is the most important method for estimating the cost of capital that…

A: In this capital asset pricing model is commonly used in determining the cost of equity.

Q: Define the terms “book-value capital structure,” “market-value capital structure,” and“target…

A: Book value capital structure refers to the relative proportion of common stock, preferred stock,…

Q: One should determine the after-tax weighted average cost of capital by   Multiple Choice A)…

A: After-tax weighted average cost of capital = Weighted average after tax cost of debt + Weighted…

Q: Discuss two drawbacks of utilizing the weighted average cost of capital to make investment choices…

A: This question explains the disadvantages to using the weighted average cost of capital to allocate…

Q: Weighted average cost of capital is the combined cost of capital using a capital mix. The capital…

A: Weighted Average Cost of capital is computed based on relevant rate of return from the debt and…

Q: Describe your understanding of the term "Financial Capital." When it comes to capital, what is the…

A: HERE IS THE ANSWER:

Q: Based on the given information, how much is the weighted average cost of capital?

A: Market value of ordinary shares = P 5 million Market value of long term debt = P 6.25 million Total…

Q: Choose from the following that is NOT a major element of the working capital cycle?   A…

A: Working Capital is the difference between the company’s current assets and the current liabilities.

Q: Why isn’t accounting net income used in the net present value and internal rate of return methods of…

A:

Q: Determine the weighted average cost of capital using: (a) Book value weights, and (h) Market yalue…

A: WACC (Weighted Average Cost of Capital): It is the cost of capital of the firm for raising capital…

Q: capital

A: Capital budgeting is estimating the level of the firm's profitability on its future projects. Future…

Q: Weighted average cost of capital is the combined cost of capital using a capital mix. The capital…

A: a. Market value of debt and equity Market values should always be used for calculating cost of…

Q: What is the weighted average cost of capital (WACC), and how is it calculated? Kindly answer ASAP

A: WACC is the combined return demanded by both equity and debt holders.

Q: Explain why the weighted average cost of capital (WACC) is used in capital budgeting.

A: WACC = multiplying the cost of each capital source (debt and equity) by its relevant weight by…

Q: How is the weighted average cost of capital calculated? Write outthe equation

A: WEIGHTED AVERAGE COST OF CAPITAL (WACC): IT IS THE CALCULATION FOR FIRMS COST OF CAPITAL IN WHICH…

Q: Discuss two limitations of using the weighted average cost of capital when making investment…

A: The corporation's cost of capital, calculated using both debt and equity, is known as the Weighted…

Q: Which of the following is a present value method of analyzing capital investment proposals? Uaverage…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.