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What is Understanding Cost of Capital and WACC about?
Chapter 6 discusses the cost of capital, which is the return required by investors based on the risk they take, and outlines the creditor hierarchy in case of liquidation. It explains the weighted average cost of capital (WACC) as a critical measure for raising additional capital, incorporating the costs of debt and equity. The chapter also covers various methods for calculating the cost of debt, preferred stock, and equity, including the dividend discount model and capital asset pricing model.
- Author
- hapfy
- Language
- EN