Think about the importance of understanding the cost of capital to a business.

Think about the importance of understanding the cost of capital to a business.

Think about the importance of understanding the cost of capital to a business. Comment on why it is important, and explain why as debt increases (in capital structure), eventually the WACC will increase (despite the fact debt is usually the lower cost component cost of capital). How does your current or past company, or one you know of, decide on its cost of capital?

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