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6 Cards in this Set
- Front
- Back
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Weighted average cost of capital (Marginal cost of capital)
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Discount rate to apply in capital budgeting project
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Optimal capital budget
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Intersection of investment opportunity schedule and WACC
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Project Beta
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Measure of its market risk
Cannot estimate project beta directly |
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Pure-play method
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Use equity beta of a publicly traded firm that is engaged with business similar to, and risk similar to project
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Break Points
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Amount of capital at which component's WACC changes / Weight of component in capital structure
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Floatation cost
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Fees charged by investment bank when a company raises external equity capital
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