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Unformatted text preview: PV of the inflows equals the PV of outflows. The problem with is when you have multiple IRRs or non-normal type projects. The best method to use is the NPV method. The other two methods can give some erroneous data. 2. The senior executives were impressed. The Weighted Average Cost of Capital is the amount of debt and equity a company must maintain. This is the return on existing assets and business operations. This is in direct correlation to the current value of stock. The formula is [Rd x D/V x (1-5)] + [Re x E/V}. Rd= Bonds yield, D=market value, 1-tax rate; Re is the share holders return on requirement. This is used to find the rate of return and help to calculate current stock price....
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- Spring '11