Cost of capital O can be calculated with CAPM O is different of the WACC reflects only equity holders' required rate of return O depends on debt In the discounted cash flow model, equity value is computed as The cumulative present value of abnormal earnings plus the beginning book value O The discounted abnormal earnings growth O The present value of the future cash flows to shareholders O The present value of the free cash flow to equity holders

Cost of capital O can be calculated with CAPM O is different of the WACC reflects only equity holders' required rate of return O depends on debt In the discounted cash flow model, equity value is computed as The cumulative present value of abnormal earnings plus the beginning book value O The discounted abnormal earnings growth O The present value of the future cash flows to shareholders O The present value of the free cash flow to equity holders

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter17: Dynamic Capital Structures And Corporate Valuation

Section: Chapter Questions

Problem 1Q

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