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Cost of Capital

C/F/866. An evaluation of the options available to raise capital for new investments

WORDS:
1400
DATE:
2010
PRICE:
19.99 GBP

This paper looks at debt and equity in regards to raising capital for new investments. The Capital Asser Pricing Model (CAPM) and Weighted Average Cost of Capital (WACC) are both used to determine the risk of the company in relation to debt and equity and the costs of capital rising as a consequence. The paper discusses debt purchase, gearing ratio, capital structure theory, trade off theory, and pecking order theory. The paper concludes by suggesting that purchasing debt is an option for financing new investments.

 

KEYWORDS: Debt, equity, capital, investments, Capital Asser Pricing Model, CAPM, Weighted Average Cost of Capital, WACC, capital, debt purchase, gearing ratio, capital structure theory, trade off theory, pecking order theory,

 
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