FIN 370 Finance For Business Week 4 Complete

Week 4

Discussion Question 1

What are main elements in calculating the cost of capital? How would an increase in debt affect it? How would you identify an organization’s optimal cost of capital?

Discussion Question #2

What is meant by WACC? What are some components of WACC? Why is WACC a more appropriate discount rate when doing capital budgeting? What is the effect on WACC when an organization raises long-term capital?

Discussion Question #3

What is an IPO? How does an IPO allow an organization to grow financially? When is a merger or an acquisition, instead of an IPO, more appropriate?

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