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Issue:

Business

 

Written by:

Anita M

 

Date added:

April 6, 2014

 

Level:

University

 

Grade:

A

 

No of pages / words:

2 / 330

 

Was viewed:

3504 times

 

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Essay content:

The blend is called the weighted-average. b. The true cost of capital depends on a project risk not on the company undertaking the project. Two reasons for being so important: I. Many projects can be treated as average risk, that is , no more or less risky than the average of the compant’s other assets...
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For these projects the company cost of capital is the right discount rate. II. The company cost of capital is a useful starting point for setting discount rates for unusually risky or safe projects. It is easier too add to , or subtract from, the company cost of capital than to estimate each projects cost of capital from scrape...
displayed 300 characters

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