5.3 discussion: cost & sources of capita
A firm grasp of the cost and sources of capital is fundamental to business success. Not understanding the sources of capital will severely limit the ability to grow, while not being aware of the true cost can lead to investing in projects that are not profitable.
Upon successful completion of the course material, you will be able to:
- Understand the cost and sources of capital.
- Textbook: Foundations of Financial Management
- Website: Connect
- Review the rubric to make sure you understand the criteria for earning your grade.
- Review Chapter 11 in Foundations of Financial Management. As you read this chapter, pay close attention to the various sources of capital and the associated costs.
- Navigate to the threaded discussion and respond to the following:
- Why do firms calculate their weighted average cost of capital?
- In computing the cost of capital, which sources should be considered?
- How does a firm’s tax rate affect its cost of capital? What is the effect of the flotation costs associated with a new security issue on a firm’s weighted average cost of capital?
- Your initial post is due by the end of the fourth day of the workshop. Your response should be 200 to 300 words in length and include one academic source that is properly cited.
- For questions on APA style, go to OCLS APA Writing Style Guides.
- Read and respond to at least two of your classmates’ postings, as well as all follow-up instructor questions directed to you, by the end of the workshop. Each response should be at least 100 words and include one academic source that is properly cited.
- Your postings should also:
- Be well developed by providing clear answers with evidence of critical thinking.
- Add greater depth to the discussion by introducing new ideas