FIN 370 Week 2 DQ 2

Basic definition: What are main elements in calculating the cost of capital?

PLUS:

Go to the UOP Library. Find a peer-reviewed article that answers the following questions. Identify and analyze the author’s thesis and conclusion. Do you agree with the author? Why or why not? Be sure to cite your reference.

How does an increase in debt affect the cost of capital? How do you identify an organization’s optimal cost of capital?


Response:

Some companies have been known to overlook the opportunity cost that is affected by capital expenditures. A company must understand the debt that will be obtained from capital expenses.
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