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Unformatted text preview: required return and how a stock with a beta other than 1.0 will respond to changes in the market Be able to calculate the beta of a portfolio given the betas and weights of individual stocks in the portfolio Cost of Capital Know the definition and formula for the weighted average cost of capital (WACC) Know how to determine the market value of each of the components of a firms capital Know how to calculate the after-tax cost of debt given the market value of debt and the coupon rate Understand how WACC should be adjusted for projects Understand how the required return for a project is used to determine whether a project should be accepted or rejected given a projects IRR...
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- Spring '08