Shared Flashcard Set

Details

Title

Chapter 12: Cost of Capital

Description

Book: Essentials of Corporate Finance

Total Cards

Subject

Finance

Level

Undergraduate 3

Created

04/29/2010

Click here to study/print these flashcards.

Create your own flash cards! Sign up here.

Additional Finance Flashcards

Term

Cost of Equity

Definition

The return that equity inveetors require on their investment in the firm

Term

Cost of Debt

Definition

The return that lenders requre on the firm's debt

Term

Weighted average cost of capital (WACC)

Definition

The weighted average of the cost of equity and the aftertax cost of debt

Term

Pure play apporach

Definition

Use of a WACC that is unique to a particular project, based on companies in similar lines of business