a. What is a firm's cost of capital? b. Why is the company's cost of capital important in financial decisions?

Q: a. What is meant by a company's cost of capital? b. Why is the company's cost of capital critical…

A: Company needs fund to purchase the assets and for operations. Companies finance with Debt and…

Q: What are the sources or capital available to business? Why is the capital mix of a company so…

A: The sources of capital available to business: Equity: A company's capital is raised by issuing…

Q: How can the components of working capital affect the cash position of a firm?

A: The question is based on the concept of working capital and effect of change in working capital on…

Q: What are the main components of a company’scost of capital?

A: Cost of capital It is essential to come back to make a capital planning venture advantageous, for…

Q: What is capital structure of a company and explain why it is important?

A: The capital structure of a company and explain why is important will be explained:

Q: What is financial leverage, and how does it relate to the capital structure of a business?

A: Financial leverage is the use of debt to finance the acquisition of assets. In other words, it is…

Q: What are the components of the Capital Structure of a Company? and explain the importance of Capital…

A: The capital structure is the structure of sources of funds of the company. The capital structure…

Q: What is a firm’s net working capital? And what does it tell you about the liquidity of the firm?

A: Working capital of the firm means net assets of the firm. Working capital can be find as total…

Q: What is the purpose, function, and importance of Capital Investment Decisions in a business

A: The purpose, function, and importance of Capital Investment Decisions in a business will be…

Q: Is cost of capital set by investors or managers?

A: Cos of capital (Coc) is rate of return required to make capital budgeting decisions for example,…

Q: Why is it important for a firm to know how to determine their cost of capital?

A: Cost of capital is the cost that a business incurs for financing its business, operations and…

Q: How do the types of assets used affect a firm’s capital structure?

A: There are 2 types of assets, fixed assets and current assets. Fixed assets have life for long period…

Q: What is the use of Capital Investment Decisions in a business as well as its role, function and how…

A: Investment appraisal or evaluation is the two-fold task of balancing risk pertain to a definite…

Q: What factors contribute to the business risk of a company? What is financial risk? How do the…

A: Financial risk relates to how a company uses its financial leverage and manages its debt load.…

Q: Does capital structure influence the value of a firm? Why or why not?

A: The capital structure refers to the combination of different sources of capital in the capital base…

Q: Why is the WACC (weighted average cost of capital) important? When is it useful to a company?

A: Weighted average cost of capital is important to determine the minimum required return of all the…

Q: How does the firm’s internal condition affect its actual capital structure?

A: The capital structure is the structure of mix of debt and equity which shows how a company has…

Q: What are we referring to when we discuss the “optimal capital structure” of a business? Why is the…

A: The Optimal capital structure of a business refers to the combination of debt and equity financing…

Q: What is the primary purpose of computing the cost of capital? a. To determine the market value of…

A: The cost of capital is a financial metric that represents the minimum return that a company must…

Q: What is meant by capital structure, what are the characteristics of it's main components, and how…

A: Meaning of Capital Structure: - It is the most important factor of a company. A company can not run…

Q: How do “windows of opportunity” impact a firm’s capital structure?

A: Windows of opportunity : In simple words, windows of opportunity, in this context, relates to the…