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Importance of Cost of Capital: Why is cost of capital important to an organization, and what does it measure?

Post Date: 28 - Jan - 2020

Overview: For this task, you will explain the importance of cost of capital to organizational success and work through some calculations to understand their value.

Prompt: First, review the module resources, especially Chapter 11 in the textbook. Then, address the following:

 Answer the following questions based on your organization chosen for the final project. Write your response in a separate Microsoft Word document:

o Importance of Cost of Capital: Why is cost of capital important to an organization, and what does it measure?

o Meaning of Calculations: How do organizations calculate various costs, and what do these calculations mean to business?

 After completing the written portion, calculate answers to the problems in the worksheet.

Refer to the textbook and other course materials to support your responses.


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