CAPITAL BUDGETING AND THE COST OF CAPITAL

1. Find out your chosen company’s credit rating. Rating agencies such as Moody’s and Standard and Poor’s assign ratings to companies. AAA is high, AA is lower, BBB is even lower,The higher the rating, the lower the cost of debt capital. Explain what...

CAPITAL BUDGETING AND THE COST OF CAPITAL

1. The table below gives the initial investment and expected cash flows over the next five years for two different projects. Assume that the industry you are in expects a return of 10%, which you use as the discount rate in net present value (NPV) calculations and as...