The Cost of Capital.pptVIP

Topics Covered Geothermal’s Cost of Capital Weighted Average Cost of Capital (WACC) Capital Structure Required Rates of Return Big Oil’s WACC Interpreting WACC Flotation Costs Cost of Capital Cost of Capital - The return the firm’s investors could expect to earn if they invested in securities with comparable degrees of risk. Capital Structure - The firm’s mix of long term financing and equity financing. Cost of Capital Example Geothermal Inc. has the following structure. Given that geothermal pays 8% for debt and 14% for equity, what is the Company Cost of Capital? Cost of Capital Example