TheCostofCapital培训资料课件.pptVIP

CHAPTER 10The Cost of CapitalCost of capital componentsAccounting for flotation costsWACCAdjusting cost of capital for riskEstimating project risk第一页，共四十一页。 What types of capital do firms use?DebtPreferred stockCommon equity: Retained earnings New common stock第二页，共四十一页。 Stockholders focus on A-T CFs.Therefore, we should focus on A-T capital costs, i.e., use A-T costs in WACC. Only kd needs adjustment.Should we focus on before-tax or after-tax capital costs?第三页，共四十一页。 The cost of capital is used primarily to make decisions that involve raising new capital. So, focus on today’s marginal co