Cost of Capital Calculation Examples, Samples, Concepts, Illustrations Help Online
Looking for Cost of Capital Calculation Examples, concepts and illustrations help to do your assignments, homework or project then you are at the right place.
Cost of Capital Calculation Example Concept
Cost of capital can be defined as the opportunity cost of making a specific investment. It means the rate of return the investor could have earned by investing the same amount into a different investment having the same risk. The cost of capital includes the cost of equity and cost of debt. Calculation of both the cost of equity and debt is known as overall cost of capital. Cost of capital depends upon various factor such as operating history, profitability, credit worthiness etc.
The basic formula for calculating weighted average cost of capital is as follows
WACC = ((E/V) x Re) + [((D/V) x Rd) x (1-T)]
E is the Market value of the company’s equity
D is the Market value of the company’s debt
V = Total Market Value of the company (E + D)
Re = Cost of Equity
Rd = Cost of Debt
T= Tax Rate
Services We Offer
Popular Finance Assignment Help Online Services
Assignment always put student on worries and stress. But with Assignment Consultancy for your help, you can select any of our popular services and remove all your worries here.
- Project Finance Case Studies Help
- Finance Online Exam Help
- Balance Sheet Analysis Homework Help
- Activity Ratios Financial Assignment help
- Performance Ratios Analysis Finance Assignment help
- Activity Ratio Assignment Help
- Market Based Ratio Analysis Assignment Help
- Profitability Ratio analysis Assignment Help
- Financial statement analysis case study assignment help
- Finance MBA assignment help
- Economics assignment help
- Statistics assignment help
- Business Plan assignment help
Why Select Us
Finance Assignment Help Online Features
We believe in providing no plagiarism work to the students. All are our works are unique and we provide Free Plagiarism report too on requests.
Our customer representatives are working 24X7 to assist you in all your assignment needs. You can drop a mail to assignmentconsultancy.help@gmail.com or chat with our representative using live chat shown in bottom right corner.
We are the only service providers boasting of providing original, relevant and accurate solutions. Our three stage quality process help students to get perfect solutions.
All our works are kept as confidential as we respect the integrity and privacy of our clients.
Referral Program
Refer us and Earn up to 5000 USD
Place Order and generate unique Code
Whenever you make a payment. You are eligible for a referral code, just request in email so that you will get the code which you can share with your friends.
Earn Money
You will be eligible for referral bonus if your friend place the order using the same referral code using no other discounts after successful payment made by him.
Encash it or Use it in your next assignments
You can request the encashment as mentioned in step 2 or you can use it as a method of payment for your next assignments.
Cost of Capital Calculation Example Explanation
Let’s understand the concept with help of an example.
Example: Assume a company’s capital structure consists of 80% equity and 20% debt; its cost of equity is 20% and after-tax cost of debt is 8%. Therefore, its WACC would be (0.8 x 20%) + (0.2 x 8%) = 17.6%. This is the rate of return that the company expects to compensate to all its investors.
If you are facing problems in calculating the cost of capital then type assignment, click here . You can visit us for more examples here.