Cost of Capital
What are the three sources of financing?
What are Debt, Preferred Stock, and Common Equity
What does NPV stand for?
What is "Net Present Value"
What is capital budget
What is the analysis that alters the effect of a single change in a project?
What is a Sensitivity Analysis?
The expected rate of return on a portfolio of all the firm's securities.
What is WACC
What is the Internal Rate of Return (IRR) defined as?
What is the discount rate at which NPV = 0.
Cash Flow forecasts are influenced by that factors
What is the analysis that develops an optimistic and pessimistic analysis of a project by changing multiple factors?
What is a scenario analysis
The measure of risk calculated as a regression on the company's stock price.
What is Beta
A company should accept all projects with a ______ NPV.
What is "positive".
The solutions given for capital budgeting issues
Why would a company perform uncertainty analyses on their projects?
What is "to determine the possible variation in the project"
A condition of an organization that has so much existing debt so great that it cannot easily borrow more money.
What is Debt Overhang
What is the difference between IRR and MIRR that makes MIRR better?
Calculate the WACC of a company with:
$150 million market value of debt
$275 million market value of equity
8% cost of debt
14% cost of equity
35% tax rate
What is 10.89%
Calculate the NPV of a company with:
WACC = 10%
Year CFt
0 -100
1 10
2 60
3 80