In Elements In Calculating The Cost Of Capital How Does An Increase In Debt Affe

What are main elements in calculating the cost of capital? How does an increase in debt affect it? How do you identify an organization’s optimal cost of capital?

Example, The equation for cost of capital isWACC = Weight of debt*after­tax cost of debt + Weight of equity*Cost of equity + Weight of preferred stock*Cost of preferred stockLet’s say weight…

 

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