This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: . r preferred r preferred = Div Po Issues with WACC (12.6) 1. Debt can have 2 costs -Costs of debt itself-Cost of increase risk 2. B can change 3. Taxes (Corporate) Free Cash Flows (FCF) – more accurate measurements of the PV than DIV, EPS, etc. PV = FCF + FCF2 + …………. . FCFt + Pt . (1+r) (1+r)^2 (1+r)^t (1+r)^t Note cards 5X6 front and back Practice final online Review sheets After tax cost of debt = pretax cost of debt * (1-tax rate) If the question says after tax cost ………. Than do not multiply the tax rate what ever that cost is. 40 – 50 questions on the final Note cards 5 x 7 one side only, name on the back Tables Calculator...
View Full Document
This note was uploaded on 09/08/2010 for the course BUS 170 at San Jose State University .