复件Risk,CostofCapital,andCapitalBudgeting.pptVIP

Risk, Cost of Capital, and Capital Budgeting Key Concepts and Skills Know how to determine a firm’s cost of equity capital Understand the impact of beta in determining the firm’s cost of equity capital Know how to determine the firm’s overall cost of capital Where Do We Stand? This chapter discusses the appropriate discount rate when cash flows are risky. an all-equity firm is seeking to value a risky project, the firm will determine the required return, rs, We call rs the firm’s cost of equity capital. When firms finance with both debt and equity, the discount rate to use is the project’s ove