B Com Exam > B Com Videos > Cost Accounting > Weighted Average Cost of Capital - Material Cost, Cost Accounting
Weighted Average Cost of Capital - Material Cost, Cost Accounting Video Lecture | Cost Accounting - B Com
|
106 videos|173 docs|18 tests
|
FAQs on Weighted Average Cost of Capital - Material Cost, Cost Accounting Video Lecture - Cost Accounting - B Com
| 1. What is the formula for calculating Weighted Average Cost of Capital (WACC)? |  |
Answer: The formula for calculating WACC is WACC = (E/V) * Re + (D/V) * Rd * (1 - Tc), where E is the market value of equity, V is the total market value of equity and debt, Re is the cost of equity, D is the market value of debt, Rd is the cost of debt, and Tc is the corporate tax rate.
| 2. How is the cost of equity calculated in the Weighted Average Cost of Capital (WACC) calculation? | |
Answer: The cost of equity is calculated using the Capital Asset Pricing Model (CAPM), which considers the risk-free rate, the equity market risk premium, and the beta of the company's stock. The formula for cost of equity is Re = Rf + β * (Rm - Rf), where Rf is the risk-free rate, β is the beta of the stock, Rm is the expected market return, and Rf is the risk-free rate.
| 3. What factors are considered when determining the cost of debt in the Weighted Average Cost of Capital (WACC) calculation? | |
Answer: The cost of debt takes into account factors such as the interest rate on current debt, the credit rating of the company, and the market interest rates. The cost of debt is typically calculated as the yield to maturity on bonds or the interest rate on current debt.
| 4. How does the Weighted Average Cost of Capital (WACC) impact a company's investment decisions? | |
Answer: The WACC is used as a discount rate to evaluate the feasibility of investment projects. If the expected return on an investment is higher than the WACC, it suggests that the project will generate a return greater than the cost of capital and may be worth pursuing. Conversely, if the expected return is lower than the WACC, it indicates that the project may not be financially viable.
| 5. How can a company lower its Weighted Average Cost of Capital (WACC)? | |
Answer: A company can lower its WACC by taking steps such as reducing its cost of debt through refinancing at lower interest rates, improving its credit rating, and optimizing its capital structure. Additionally, decreasing the cost of equity can be achieved by improving the company's financial performance and reducing perceived risk, which can lead to a lower beta and a lower required rate of return for investors.
Related Exams
About this Video
|
4.68/5 Rating |
|
Dec 23, 2024 Last updated |
Video Description: Weighted Average Cost of Capital - Material Cost, Cost Accounting for B Com 2024 is part of Cost Accounting preparation.
The notes and questions for Weighted Average Cost of Capital - Material Cost, Cost Accounting have been prepared according to the B Com exam syllabus.
Information about Weighted Average Cost of Capital - Material Cost, Cost Accounting covers all important topics for B Com 2024 Exam.
Find important definitions, questions, notes, meanings, examples, exercises and tests below for Weighted Average Cost of Capital - Material Cost, Cost Accounting.
Introduction of Weighted Average Cost of Capital - Material Cost, Cost Accounting in English is available as part of our Cost Accounting for B Com & Weighted Average Cost of Capital - Material Cost, Cost Accounting in
Hindi for Cost Accounting course. Download more important topics related with notes, lectures and mock test series for
B Com Exam by signing up for free.
Description
Video Lecture & Questions for Weighted Average Cost of Capital - Material Cost, Cost Accounting Video Lecture | Cost Accounting - B Com - B Com full syllabus preparation | Free video for B Com exam to prepare for Cost Accounting.
Information about Weighted Average Cost of Capital - Material Cost, Cost Accounting
Here you can find the meaning of Weighted Average Cost of Capital - Material Cost, Cost Accounting defined & explained in the simplest way possible.
Besides explaining types of Weighted Average Cost of Capital - Material Cost, Cost Accounting theory, EduRev gives you an ample number of questions to practice Weighted Average Cost of Capital - Material Cost, Cost Accounting tests,
examples and also practice B Com tests.
|
106 videos|173 docs|18 tests
|
|
Explore Courses for B Com exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
Related Searches
mock tests for examination
,Free
,Important questions
,Semester Notes
,Weighted Average Cost of Capital - Material Cost
,video lectures
,Cost Accounting Video Lecture | Cost Accounting - B Com
,past year papers
,Sample Paper
,Weighted Average Cost of Capital - Material Cost
,ppt
,practice quizzes
,Summary
,Viva Questions
,Weighted Average Cost of Capital - Material Cost
,MCQs
,Cost Accounting Video Lecture | Cost Accounting - B Com
,Previous Year Questions with Solutions
,study material
,Cost Accounting Video Lecture | Cost Accounting - B Com
,Objective type Questions
,shortcuts and tricks
,Extra Questions
,Exam
;
Study Weighted Average Cost of Capital - Material Cost, Cost Accounting on the App
Students of B Com can study Weighted Average Cost of Capital - Material Cost, Cost Accounting alongwith tests & analysis from the EduRev app,
which will help them while preparing for their exam. Apart from the Weighted Average Cost of Capital - Material Cost, Cost Accounting,
students can also utilize the EduRev App for other study materials such as previous year question papers, syllabus, important questions, etc.
The EduRev App will make your learning easier as you can access it from anywhere you want.
The content of Weighted Average Cost of Capital - Material Cost, Cost Accounting is prepared as per the latest B Com syllabus.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup