finance wahhhh

Capital

A firm’s sources of financing to fund its assets

Capital Structure

The relative proportions of debt, equity, and other securities that a firm has outstanding.

Cost of Capital

reflects the average riskiness of all the securities the firm has issued. provides an indication of how the market views the risk of those assets. The return to an investor (required return) is the same as the cost to the company (cost of capital).

Cost of Debt 

the required return that lenders require on the company’s new debt. estimated by computing the YTM. 

Cost of Preferred Stock

generally considered to be a perpetuity,

Cost of Equity / Common Stock

the return required by equity investors on their investment in the firm given the risk of the cash flows from the firm.

The Weighted Average Cost of Capital

Project Cost of Capital