Content
&.#61550. The cost of Capital
&.#61550. The cost of equity
&.#61550. Simple cost of debt calculations
&.#61550. WACC
Knowledge checklist
Able to explain the rationale for the use of the WACC in project appraisal.
Able to calculate the cost of equity using both the dividend valuation model and the CAPM.
Able to explain the reasons for different estimates of the cost of equity using the two
models.
Able to calculate the cost of both dated and undated loan stock which means,
Able to do IRR calculations and to calculate a WACC.