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The Cost of Capital as a Weighted Average

Journal of Finance, 1975
IN RESEARCH, teaching, and application we have found it convenient for some time now to compute the cost of capital as a weighted average of the costs of the various sources of capital. This entire notion, though, that the true cost of capital can be computed as a weighted average of the component costs has recently been questioned.
Nantell, Timothy J, Carlson, C Robert
exaly   +4 more sources

Efficient management of working capital and weighted average cost of capital

International Journal of Accounting and Finance, 2020
Amarjit Gill
exaly   +2 more sources

Investment and the weighted average cost of capital

Journal of Financial Economics, 2016
Murray Z Frank
exaly   +2 more sources

Investment, Q, and the Weighted Average Cost of Capital

SSRN Electronic Journal, 2012
In a standard q-theory model, corporate investment is negatively related to the cost of capital. Empirically, we find that the weighted average cost of capital matters for corporate investment. The form of the impact depends on how the cost of equity is measured.
Murray Z. Frank, Tao Shen
openaire   +1 more source

On the Weighted Average Cost of Capital

The Journal of Financial and Quantitative Analysis, 1973
The weighted average cost of capital is a widely used concept in the theoretical literature of finance as well as in the analysis of capital expenditures of business firms. The importance of the concept derives from its use as the cutoff point for investment in capital projects and as an indicator of optimal capital structure.
Raymond R. Reilly, William E. Wecker
openaire   +1 more source

Flotation Costs and the Weighted Average Cost of Capital

The Journal of Financial and Quantitative Analysis, 1976
The weighted average cost of capital (Ko) is presented in virtually all textbooks in financial management and capital budgeting as a practical concept fundamental to the actual selection of optimal financial and investment alternatives. As often employed Ko can be defined aswhereKo = the weighted average cost of capital,Ks = the cost of equity capital ...
John R. Ezzell, R. Burr Porter
openaire   +1 more source

THE WEIGHTED AVERAGE COST OF CAPITAL: COMMENT

The Journal of Finance, 1975
IN A RECENT article in this Journal, Prof. Ardittil argued that the weighted average cost of capital could only be properly employed by a firm possessing earnings expectations in the form of a perpetuity. We shall contend that this point is invalid and can be traced to a basic misunderstanding of the concept of income.2 Arditti defined earnings before ...
openaire   +1 more source

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