Capital is necessary for a firm to operate and different financing sources like debt and equity are needed to support operations and capital expenditures. The cost of capital is the minimum rate of return a firm must earn on investments to satisfy investors. There are various types of debt like convertible and straight debt. Debt is preferred over equity for financing due to management control and lower costs. The cost of debt is estimated using yield-to-maturity and is not the coupon rate. Common equity and preferred stock are other financing sources, with the cost of equity determined using dividend growth models or the capital asset pricing model approach.
Capital is necessary for a firm to operate and different financing sources like debt and equity are needed to support operations and capital expenditures. The cost of capital is the minimum rate of return a firm must earn on investments to satisfy investors. There are various types of debt like convertible and straight debt. Debt is preferred over equity for financing due to management control and lower costs. The cost of debt is estimated using yield-to-maturity and is not the coupon rate. Common equity and preferred stock are other financing sources, with the cost of equity determined using dividend growth models or the capital asset pricing model approach.
Capital is necessary for a firm to operate and different financing sources like debt and equity are needed to support operations and capital expenditures. The cost of capital is the minimum rate of return a firm must earn on investments to satisfy investors. There are various types of debt like convertible and straight debt. Debt is preferred over equity for financing due to management control and lower costs. The cost of debt is estimated using yield-to-maturity and is not the coupon rate. Common equity and preferred stock are other financing sources, with the cost of equity determined using dividend growth models or the capital asset pricing model approach.
Capital is necessary for a firm to operate and different financing sources like debt and equity are needed to support operations and capital expenditures. The cost of capital is the minimum rate of return a firm must earn on investments to satisfy investors. There are various types of debt like convertible and straight debt. Debt is preferred over equity for financing due to management control and lower costs. The cost of debt is estimated using yield-to-maturity and is not the coupon rate. Common equity and preferred stock are other financing sources, with the cost of equity determined using dividend growth models or the capital asset pricing model approach.
