Upgrade to remove ads
Chapter 9 Finance 362
Terms in this set (8)
the cost of making a choice defined in terms of the next best alternative that is foregone.
the firm's policies regarding the sources of financing it plans to use and the particular mix (portions) in which they will be used.
Cost of debt
the rate that has to be received from an investment in orders to achieve the required rate of return for the creditors.
the cost incurred by the firm when it issues securities to raise funds.
Cost of preferred equity
the rate of return that must be earned on the preferred stockholders' investment in order to satisfy their required rate of return.
Cost of common equity
the rate of return that must be earned on the common stockholders' investment in order to satisfy their required rate of return.
the mix of long-term sources of funds used by the firm. This is also called the firm's capitalization. The relative total percentage of each type of fund is emphasized.
the cost of capital for a specific business or division.
You might also like...
FIN 301 Ch 10
Finance Chapter 9: Cost of Capital
Chapter 9: Cost of Capital
Finance Chapter 12
Other sets by this creator
Chapter 12 Finance 362
Chapter 6 Finance 362
Chapter 11 Finance 362