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Topic: Business
Number of pages / Number of words: 2 / 321
Essay's paper body

In his book Creating Shareholder Value, Alfred Rappaport states:

The appropriate rate for discounting the company's cash flow stream is the weighted average of the costs of debt and equity capital. For example, if a company's after tax cost of debt is 6% and its estimated cost of equity is 16% and it plans to raise capital 20% by way of debt and 80% by way of equity, it computes the cost of capital at 14% as follows:

Weight Cost Weighted Cost

Debt 20% 6% 1...


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In his book Creating Shareholder Value, Alfred Rappaport states:

The appropriate rate for discounting the company's cash flow stream is the weighted average of the costs of debt and equity capital. For example, if a company's after tax cost of debt is 6% and its estimated cost of equity is 16% and it plans to raise capital 20% by way of debt and 80% by way of equity, it computes the cost of capital at 14% as follows:

Weight Cost Weighted Cost

Debt 20% 6% 1...


Essay fragment

General points of the essay

Capital Budgeting and Cash Flow Estimation Cash Flow Creating Shareholder Value cash flow issue Debt and equity Equity, Cash Flow, and Notes Analysis Equity, Cash Flow, and Notes analysis Paper Equity-Cash Flow-Notes Analysis Paper Example of analysis of cash flow Funds flow through the financial system from surplus entities to deficit entities in various ways. For example, funds may flow via financial intermediaries or through equity markets or through debt markets. How do you account for the existence of ... KMART Equity, cash flow, notes Walgreen'S Cash Flow Weighted Average Cost of Capital Cash Flow Management Stream Flow Project

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