Tricks of the Trade
w How are costs of financing determined?
Ë Return on equity can be derived from market data.
Ë Cost of debt is set by the market given the specific
rating of a firm’s debt.
Ë Preferred stock often has a preset dividend rate.
Tricks of the Trade
w How are costs of financing determined?
Ë Return on equity can be derived from market data.
Ë Cost of debt is set by the market given the specific
rating of a firm’s debt.
Ë Preferred stock often has a preset dividend rate.