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Which of the following is most appropriate hurdle or discount rate for evaluating investment projects:

Which of the following is most appropriate hurdle or discount rate for evaluating investment projects: a. Cost of Equity Capital b. Cost of Preference Capital c. Weighted Average Cost of Capital d. Cost of Debt

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Question ajoutée par Utilisateur supprimé
Date de publication: 2014/08/10
Asad zaman
par Asad zaman , Audit/Finance , Rafaqat Baber and co

Risk adjusted WACC.. option" C"

 

Ednalyn Banuelos, CMA
par Ednalyn Banuelos, CMA , Projects Accountant , Grade Ref., LLC

Option C - WACC

 

The Cost of Capital has two elements : debt and equity.

Arati Tare
par Arati Tare , Analyst - Real Estate & Hospitality , Deyaar Development

WACC

 

However, a discount rate is more specific to the investor. WACC is a scientific way to calculate the % rate which may or may not be equal to the expected discount or hurdle rate by the investor.

Fouzan Qadeer
par Fouzan Qadeer , Corporate Financial Analyst , Balubaid Group

Option C.Since it is a sum of all the other options according to their respective contribution (weight) to the overall capital employed.

Menerva Melad
par Menerva Melad , Account Executive, Key Accounts , Graphic Home Company

. Weighted Average Cost of Capital

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