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Marginal Cost of Capital & Some MCQ's (in Hindi)
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Very good lesson sir thanks
1 ka c,2ka c,3ka d,4ka c,5ka b,7ka a 1 or 2 , explain kar do please. b find out: 15=5+b(15-10) 15=5+5b 10=5b 10÷5=2 b=2 , aise hi hoga na heena mam. please tell me.
Anjali sharma
a year ago
mam,first foam assumption wala muzhe samz ni aaya,ans.3 kyu aaya. sorry to say.please clarify to me,once.
2-c 3-d 4-c 5-b 7-a Mam please First Question bta dena
1c 2c 3D 4c 5b 7a Lectures are really helping us.. Thank you so muchh for your support 💖
1-c 2-c 3-d 4-c 5-b 7-a very nice mam....thanku mam
1. Cost of Capital By Heena Malhotra

2. Cost of Capital Cost of Retained Cost and Weight Earning Cost of Combination of Cost of Equity Cost of Debt Preference Share of each sources of Capital Weighted Average Cost of Capital (WACC) By Heena Malhotra

3. WEIGHTED AVERAGE COST OF CAPITAL (WACC) WACC is also known as the overall cost of capital of having capitals from the different sources. WACC of a company depends on the capital structure of a company. o It weighs the cost of capital of a particular source of capital with its proportion to the total capital. By Heena Malhotra

4. o Securities analysts employ WACC all the time when valuing and o In discounted cash flow analysis, WACC is used as the discount rate OWACC can be used as a hurdle rate against which to assess return on O Investors use WACC as a tool to decide whether or not to invest. The selecting investments. applied to future cash flows for deriving a business's net present value. investment capital performance. WACC represents the minimum rate of return at which a company produces value for its investors. o Let's say a company produces a return of 20% and has a WACC of 11%. By contrast, if the company's return is less than WACC, the company is shedding value, which indicates that investors should put their money elsewhere. o Therefore, WACC serves as a useful reality check for investors. By Heena Malhotra

5. Book Value(BV): oMarket Value(MV): Market value weight is more correct and represent a firm's capital structure. By Heena Malhotra

6. MARGINAL COST OF CAPITAL OThe marginal cost of capital may be defined as the cost of raising additional capital. O Marginal cost is referred to as the cost incurred in raising new funds. o Marginal cost of capital is derived, when the average cost of capital is calculated using the marginal weights. O The marginal weights represent the proportion of funds the firm intends to employ. O The marginal weights represent the proportion of funds the firm intends to employ. O Thus, the problem of choosing between the book value weights and the market value weights does not arise in the case of marginal cost of capital computation. By Heena Malhotra

7. 1. Which of the following is not an assumption of the capital asset pricing model CAPM)? (a) The capital Market is efficient (b) Investors lend or borrow at a risk-free rate of return (c) Investors do not have the same expectations about the risk and return (d) Investor's decisions are based on a single-time period Given: risk-free rate of return-5 % market return-10%, cost of equity-15% value of beta (B) is (c) 2.0 (d) 2.2

8. Which of the following sources of funds is related to Implicit Cost of Capital? (a) Equity Share Capital, (b) Preference Share Capital, (c) Debentures (d) Retained earnings Which of the following cost of capital require to adjust tax? (a) Cost of Equity Shares, (b) Cost of Preference Shares, (c) Cost of Debentures, (d) Cost of Retained Earnings 3. 4. By Heena Malhotra

9. Marginal Cost of capital is the cost of (a) Additional Revenue, (b) Additional Funds, (c) Additional Interests (d) None of the above. By Heena Malhotra

10. Firm's Cost of Capital is the average cost of: (a) All sources of finance, (b) All Borowings. (c All share capital, (d) All Bonds &Debentures. By Heena Malhotra