Debt capital structure, and borrowing cost.
DUE: 12.05.14 @11:59PM
Finance managers must understand the components of both the cost of debt capital and the factors affecting these overall costs. Firstly, please, research the processes to calculate the combined costs of debt and equity. The focus here is the after-tax Weighted Average Cost of Capital (WACC). As a finance manager you need to assess what percent of financing should be debt versus equity or vice versa. Secondly, research the proportions or weights of debt versus equity influence overall cost of total financing. Thirdly, research the impact of tax rates on the cost of capital. The factors for the WACC calculation require an ongoing relationship between the managers of both accounting and finance. Taxes, like many other factors, influence cost of capital; therefore a finance manager would have some familiarity of the Income Statement in addition to a Cash Flow Statement. Both financial statements are required by the Financial Accounting Standards Board.
Please write a COMPLETE 1-page paper, double spaced that summarizes the following information above, and what you think of it.
Use standard 12-point font size
MS Word Document
1 page paper(Again, nothing less!)
1-2 sources in APA citation(I willn’t need anymore then 3 sources for sure)
Thorough Response is a must!!
And NO plagiarism!!