If you borrow money for a project, the payback interest is not included as the cost.

If you borrow money for a project, the payback interest is not included as the cost.

Project Risk [LO5]  ( student Respond)

If you borrow money for a project, the payback interest is not included as the cost.  This payback interest will be paid with the profits after all other debts are satisfied

#7 CH.17 Dividends and Payout Policy

Consider the following as you read:

How does dividend policy affect the growth of a firm?

#8 Debt Increase (Student Post)

The WACC can affected by interest rates  being modified causing the risk free rate to fluctuate and the theoretical rate of return from an investment with no risk of financial loss. If debt increases the WACC will become lower because there would be and proportion increase between debt to equity.  By debt being cheaper than equity the company WACC will drop because the change occurs. If a company has a debt of 70 % and equity of 30% and changes to 80% debt and 20% equity would be a example of how WACC would be lowered. When the WACC is high, there are higher risk associated with that companies operations and try to find ways to lower the WACC using cheaper finance resources.

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After the issuance of a debt by a company, there is usually a promise to pay the principal amount; additionally, the company has to compensate its bond-holders by ensuring it pays the interest in each year. The rate of interest payments on the debt instruments is usually the price of borrowing to the loan-issuer……………………

APA

446 words

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