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Essay

Weighted Average Cost of Capital

Essay specific features

 

Issue:

Business

 

Written by:

Jacqueline D

 

Date added:

August 4, 2014

 

Level:

University

 

Grade:

A

 

No of pages / words:

5 / 1196

 

Was viewed:

9973 times

 

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Essay content:

Instead such a return must be estimated. There are two approaches to determining the cost of equity: the Dividend Growth Model Approach and the Security Market Line (SML) Approach. The easiest way to estimate the cost of equity capital is to use the dividend growth model. In such a model, it is assumed that the firm?¦s dividends will grow at a constant rate g, the current price per share of stock P0 can be written as: P0 = D0 ?N (1+ g) = D1 RE ?V g RE ?V g Where D0 is the dividend just paid, and D1 is the next period?¦s projected dividend, and RE is the Required Rate of Return on Equity...
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Instead such a return must be estimated. There are two approaches to determining the cost of equity: the Dividend Growth Model Approach and the Security Market Line (SML) Approach. The easiest way to estimate the cost of equity capital is to use the dividend growth model. In such a model, it is assumed that the firm?¦s dividends will grow at a constant rate g, the current price per share of stock P0 can be written as: P0 = D0 ?N (1+ g) = D1 RE ?V g RE ?V g Where D0 is the dividend just paid, and D1 is the next period?¦s projected dividend, and RE is the Required Rate of Return on Equity...
displayed 300 characters

General issues of this essay:
ANALYSIS ON CAPITAL STRUCTURE, DIVIDEND POLICY & WORKING CAPITAL REQUIREMENTS OF Cost Of Capital Cost of Capital Costco - Sustainable growth model, 1997-2001 dividend discount model Expected Growth Model How Do Private Capital Flows Assist Companies In Developing Countries Sinagapore Risk-weighted capital requirements The impact of capital structure on a company’s cost of capital Weighted Average Cost Of Capital Weighted Average Cost of Capital Weighted Average Cost of Capital Weighted Average Cost of Capital To What Extent Is The Propaganda Model Applicable To Western Corporate Media? Discuss In Relation To Ownership Of The Media And Give Appropriate Examples. growth model
 

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