Interview Questions Answers.ORG
Interviewer And Interviewee Guide
Interviews
Quizzes
Home
Quizzes
Interviews Finance and Accounts Interviews:Accounting And FinanceAccounting ReportsAccounting TypesAuditor InternalBalance Sheet Bank ClerkBank ReconciliationBank TellerBasic AccountingBasic Financial ManagementBudgetaryBudgetary ControlCapital MarketCapital RationingCapital StructureCapitalizationCashierCorporate FinanceCost AccountancyCost ElementDepreciation Double Entry System ExpendituresFinanceFinance GeneralFinancial AccountingFinancial AdvisorFinancial AnalysisFinancial StatementsLedgerManager FinanceMarginal CostingMaterial Cost MBA Finance PayrollProfit And LossSupervisoryUniform CostingWorking Capital Management
Copyright © 2018. All Rights Reserved
Finance General Interview Question:
Explain what is composite cost of capital? Explain the process to compute it?
Submitted by: AdministratorComposite cost of capital is also known as weighted average cost of capital which is a measurable unit for it. It also tells about the component costs of common stock, preferred stock, and debt. Each of these components is given weightage on the basis of the associated interest rate and other gains and losses with it. It shows the cost of each additional capital as against the average cost of total capital raised. The process to compute this is first computing the weighted average cost of capital which is the collection of weights of other costs summed together. The formula is given as:-
WACC= Wd (cost of debt) + Ws (cost of stock/RE) + Wp (cost of pf. Stock)< /STRONG>
In this the cost of debt is calculated in the beginning and it is used to find out the cost of capital and other weights of cost is been calculated after the calculation each and every individual weight of the component is added and then it gives the final composite cost.
Submitted by: Administrator
WACC= Wd (cost of debt) + Ws (cost of stock/RE) + Wp (cost of pf. Stock)< /STRONG>
In this the cost of debt is calculated in the beginning and it is used to find out the cost of capital and other weights of cost is been calculated after the calculation each and every individual weight of the component is added and then it gives the final composite cost.
Submitted by: Administrator
Copyright 2007-2024 by Interview Questions Answers .ORG All Rights Reserved.
https://InterviewQuestionsAnswers.ORG.
https://InterviewQuestionsAnswers.ORG.