Learning Goals for Chapter 12- Understand the basic concept of cost of capital and the specific sources of capital that it includes.
- Determine the cost of long-term debt and the cost of preferred stock.
- Calculate the cost of common stock equity and convert it into the cost of retained earnings and the cost of new issues of common stock.
- Find the weighted average cost of capital.
- Describe the procedures used to determine break points and the weighted marginal cost of capital.
- Explain how the weighted marginal cost of capital can be used with the investment opportunities schedule to make the firm's financing/investment decision.
