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Discuss what role the cost of capital plays in capital budgeting (i.e. the allocation of capital).
b) Discuss a few of the advantages and disadvantages of obtaining capital through 1) Debt and 2)
Equity.
c) Describe how the Weighted Average Cost of Capital (WACC) is determined for a business.

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  • 1. Discuss what role the cost of capital plays in capital budgeting (i.e. the allocation of capital). b) Discuss a few of the advantages and disadvantages of obtaining capital through 1) Debt and 2) Equity. c) Describe how the Weighted Average Cost of Capital (WACC) is determined for a business.