COST OF CAPITAL

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COST OF CAPITAL HAPTER OB, siand the meaning, Concept and significance of cosy of capital Un Problems in determining cost of capital + Computatic of cost of specific sources of finance. + Compuiation of weighted average cost of capital Marginal cost of capital. + Cost of equity using Capital Asset Pricing Model, ON toachieve even the cut offrrate, the market value of its shares will fall. In fact, cost of capital is the minimurn “retum expected by its investors which will maintain the market value of shares at its present level. Hence, “9,99 st iso 49 01 quoyidde aves xe4 OWL *960| Jo wiMIwoud & ae saumudgap 948 0000S » Sans! ‘PIT A ‘o i ‘Teudes gap Jo 3509 aup ainduio> “9495 s1 Suedwoo ago} ajqeoyidde ayes xe} ay, xed ye soumuaqap 9% QOO'OS 2 sons! “pr X (o) “1 Wl a, 47 28 VONEILOY JO SISO 9441 960] Jo wunwaid so a ainduiod “60S St OYPH NPI BY, "%S 40 1unodsIp ve soumuaqap Asn] “xejoarey = 7 1gep Jorsoo xersoyy = Py aa on S=0-% =" ow + BINULOY SuIMOT]Oy Jo dyoy ayy yA pareinojes aq Ae! aap Jo 3509 xeI-ayy auf ~P2oNp=u st XB JO 1509 aANIAYA auf “2OUDH{ “XE} JO UONEINduoD ut asuadxa ajqnonpap B se pamo|[e SI IS2UBTUI SP xP2 Jo vaufed ul unowe a[qelapisting B SaABS WLI ay) ‘edURUY Jo aoInos & se pasn si Igep Uys “JoyLINY (spoao0id N =aN 2224) LN ery ay I 01 paSueys aq Kew ejnuuoy au “saltnoas Jo anjea aaey yp OU pue ens! sy wos Pariser Senoid yeu Jo JuNowe oy) se q JapISUOd P[NOYs eA JuNoastp 40 wnywaAd 1e pasted St 1g2P 242 2529 U] ledisunid= d pue sauatu] = | 3qap Jo ys09 xe aNOJag§ = * souayn dley se paryjnayeo aq eur 299P Jo 139 anssl 1gap Sip Jo 1809 Ne}-2O}oq ay) | see Be SouMUEYeP ecvd jsau01Ui Jo a1€2 94 SI 19a JO 1809 ALL qo ajquusopasap youd 80D “TL “Lgad AO L809 “I poweias pur wD 89 xe}-a4ojaq ‘ejnussoy v Jo Kear XQ “%O1 24 OSI | 000'00"| > sanssy Aueduios v ‘ajduuexe so, "199P UO? so]aq Sb possnastp St ideo aaoys 1 AO ANAC jaav parysian yo uouendiwoy e fg gyigads go 1809 Jo woRENdweD “V yeuano Jo vouEdwoy aude> Jo 1809 WW LldVo 40.1 $09 AO NOLLY.LAdIWOD ® "Of 105 @ scanned with OKEN Scanner : 1EL0 ss80 LL W LoDag 9sv0 vs0 bind 9SL-0 oso %S1 won “4 16rd oy € z 1 2K $ ao 4 sod 94h 1 PUR M4ST WP SIO} Ane TWAS ay nee ayy atuiog “99 sad 7 ayy ainduioy “1u99 sod cE st ayes yp ’ eye atp pue Ananneus ob pa i! 1 Sy ‘aamquaqep ie en Se ee panics ‘aq tm auniuagap aup pu “wunuu od 1899 J9d py 5) yay a ae 3s 9q ue wut BJO BIMIUAGAP QOL 2 489K PAL} V “7 UOHEaRsMy “Aum 7 4103 Plo: nad 19U v 404 PI Sita uodnoa au, “06'S6 249 yqap Jo 1809 xe au0jaq] = y gap Jo 1809 XU JY = "Y— “oroyy o-D%="% qo a1qewaapa. Jo 3809 xe) soy (1) so.ua puv porn q punof aq uve (Ananyou o1 pjatd) °y fo ongpa ayy jai Jo area foULaIUL 40 AWMBUL Or P[aA = "y uonrdwapos oF sivas Jo 1oquinN = u -sajgo1 anyoa juasead Suasn poysout aumuagapyagap Jo 1809 40 wn tuo os pue *"* Z*] poliad ur ysozaquy yenuue Jo wnoury = “[~ “+ iqap Jo anyea aiqeusepay = “A aimuagapngap Jo aoud ansst atp 20 anjea quaxiny =A Sa1ayyy Pye Peed Qt hen 10 ‘A 41 s yt) AP4+D. Ae) (xed + + =% ‘ " q 1 Jap a[quusapa. Jo ys09 xe) a0}9q POUJDTA 104g puE [ELL 40 AAMPEIY OF PIALA “PoYTOU mnouOYs a[duys ay SuIsn

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