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If a company's debt is low does marginal cost of capital apply?

Weighted average cost of capital includes cost of debt and cost of equity. Thus irrespective of existing proportion of debt and equity, the marginal cost is always applicable.


Is pretax cost of equity higher or lower than after tax cost of equity?

they are equal


Where can one find companies that offer low cost home equity loans?

To find companies who offer low cost home equity loans, try using a comparison engine to save time finding the lowest price. Some of the most popular include Money Supermarket, Confused and Compare the Market.


Can I refinance my mortgage if I have low equity in my house?

Yes it is possible to refinance your house if you have low equity. But you must have at least 20 percent equity before your refinance will be apporoved.


What is the forula for valuation from income basis?

Equity Charge = Equity Capital x Cost of Equity is the formula.


The cost of external equity is greater than the cost of retained earnings because a. floatation costs on new equity b. capital gains tax on new equity c. interest expense d. risk premium?

The cost of external equity is higher because the floatation costs on new equity.


Deferance between Cost of equity and cost of capital?

cost of equity denotes by "Ke" and cost of capital denotes by "Ko". Cost of Equity:- it is the expectation an investor has from his investment. it is actually the desire of investor. Cost of Debt:- it is the cost for the debt which we have raise for business . It is calculated at after tax cost as like interest is allowable in income tax.


Cost and benefits of debt financing and equity financing?

benefit of debt and equity financing


How do you calculate cost of equity when you only know total equity and PE ratio?

can't


If you have the debt assets after taxes percent of 10 percent cost of debt 8 percent and cost of equity 12 percent how is cost of capital calcuated?

WACC = Cost of Debt * Weight of Debt = + Cost of equity * Weight of Equity WAAC = .08*.10 + .12*.90 WAAC = 10.88%


What is the difference between the cost of capital and the cost of equity, and how do they impact a company's financial decisions?

The cost of capital is the overall cost of financing a company's operations, including both debt and equity. The cost of equity specifically refers to the return required by investors who have provided equity financing. The cost of capital influences a company's investment decisions, as it represents the minimum return the company must earn on its investments to satisfy its investors. The cost of equity, on the other hand, affects the company's ability to attract investors and raise funds for growth and expansion.


What is the most prevelant model for estimating the cost of equity?

The capital asset pricing model (CAPM) is the dominant model for estimating the cost of equity.