Good evening sir. For question 1, Wouldn’t it also be appropriate to say a company often uses WACC as the hurdle rate because it needs to make the return on the investment it is making in order to ensure the effective and efficient use of its capital? If WACC is 15% and if a project gives only 12%, it will eat away capital and hence, would be detrimental to the firm.
Sir one small doubt I have from many days 1.what if equity has common stock and retained earnings in equity section then what will be the cost of equity? Plzz try to explain sir?
Good evening sir. For question 1, Wouldn’t it also be appropriate to say a company often uses WACC as the hurdle rate because it needs to make the return on the investment it is making in order to ensure the effective and efficient use of its capital? If WACC is 15% and if a project gives only 12%, it will eat away capital and hence, would be detrimental to the firm.
Yes same doubt. Even I had this in mind.
If we take WACC as our hurdle rate then that would be our BEP right?
Sir one small doubt I have from many days
1.what if equity has common stock and retained earnings in equity section then what will be the cost of equity?
Plzz try to explain sir?