You can only take one of the following two projects. You have no capital constraints and the cost of capital is 10%. The information below for each project includes the IRR and NPV. Project A: Costs 500 dollars today, pays 200 at t = 1 years from now, pays 250 at t = 2 years from today, and pays 300 at t = 3 years from today. The IRR is 21.65 %. The NPV is $113.82. Project B: Costs 750 dollars today, pays 300 at t = 1 years from now, pays 350 at t = 2 years from today, and pays 400 at t = 3 years from today. The IRR is 17.93%. The NPV is $112.51. According to our class notes, which project should be the best choice? a. Flip a coin b. Choose A c. Choose B
Cost of Debt, Cost of Preferred Stock
This article deals with the estimation of the value of capital and its components. we'll find out how to estimate the value of debt, the value of preferred shares , and therefore the cost of common shares . we will also determine the way to compute the load of every cost of the capital component then they're going to estimate the general cost of capital. The cost of capital refers to the return rate that an organization gives to its investors. If an organization doesn’t provide enough return, economic process will decrease the costs of their stock and bonds to revive the balance. A firm’s long-run and short-run financial decisions are linked to every other by the assistance of the firm’s cost of capital.
Cost of Common Stock
Common stock is a type of security/instrument issued to Equity shareholders of the Company. These are commonly known as equity shares in India. It is also called ‘Common equity
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