ACCT 201 Lecture 19: CPA_19_Chapter_9_Sections_1_2_3
Document Summary
So, in a business, we want to determine whether. And where to expend funds that will increase wealth. That"s the goal of this next chapter, which describes the important concept of (cid:498)cost of capital. (cid:499) )n this cpa, we study sections (cid:891). (cid:883), Understand the concept of (cid:498)cost of capital. (cid:499) Be able to explain what is meant by the (cid:498)marginal cost of capital. (cid:499) Determine the cost of the business enterprise acquiring long-term debt. Understand the various sources of financial capital in the business enterprise. Explain why the after-tax cost of debt is the relevant cost of debt. In cpa #20, we will tackle sections 9. 4 and 9. 5, as we continue to explore the (cid:498)cost of capital(cid:499) concept. Capital the three major sources of: debt (cid:523)(cid:498)debt capital(cid:499)(cid:524, equity (cid:523)(cid:498)equity capital(cid:499)(cid:524) Cost of capital: we use the cost of capital as the discount rate in time value of money computations.
