WorksheetsCF - Capital structure & cost of capital
Total questions: 9
Worksheet time: 7mins
A company Weigthed average cost of capital includes:
The company capital structure
The company capital structure & cost of capital
The company cost of capital
The company financing sources
The company cost of debt under market value approach can be calculated using:
The balance or record by financial expenses and total debt
The CAPM model
The YTM (Yield to Maturity) rate of each bond issued by the company, and the bond value
The coupon rate of each bond issued by the company, and the bond value
A greater tax rate will affect company cost of debt (Kd) in the sense that:
The effective cost of debt will be higher
The effective cost of debt will be lower
What does reflect for a company their cost of capital?
(a)
When a company decides financing the major of their operating with debt rather than equity, the company is
High levered
Low levered
Mid-levered
Non-levered
A company will prefer:
Really, the WACC rate for a company isn't relevant
A low WACC rate
A high WACC rate
Commonly if a company is classified as a SME (Small and Medium Enterprise), the company must consider:
A lower return to the equity-holders in comparison with a return that would be expected over a large company.
The same return to the equity holders that would be expected over a large company.
The company cost of debt (Kd) because it influence the company cost of equity (Ke)
A higher return to the equity-holders in comparison with a return that would be expected over a large company.
The country risk premium (CRP) is measured mainly considering:
The continent where the country is located.
The country's 'debt quality'
The country president effectiveness
The flows of foreign capital
When the result of company D/E ratio (Debt to equity ratio) is greater than 1, it indicates:
A low risk level of company capital structure
A high risk level of company capital structure
A low risk level of company cost of capital
A high risk level of company cost of capital
