BUS 401 Week 4 Discussion 2 | Assignment Help | Ashford University
- ashford university / BUS 401
- 02 Nov 2019
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BUS 401 Week 4 Discussion 2 | Assignment Help | Ashford University
Week 4 - Discussion 2
Cost
of Capital
Corporations
often use different costs of capital for different operating divisions. Using
an example, calculate the weighted cost of capital (WACC). What are some
potential issues in using varying techniques for cost of capital for different
divisions? If the overall company weighted average cost of capital (WACC) were
used as the hurdle rate for all divisions, would more conservative or riskier
divisions get a greater share of capital? Explain your reasoning. What are two
techniques that you could use to develop a rough estimate for each division’s
cost of capital? Your initial response should be 200 to 250 words.
Guided
Response: Review several of your classmates’ posts. Respond to at least two
classmates by sharing whether you agree or disagree with their view of the use
of the company’s capital. Explain your reasoning.
Corporations
often use different costs of capital for different operating divisions. Using
an example, calculate the weighted cost of capital (WACC). What are some
potential issues in using varying techniques for cost of capital for different
divisions? If the overall company weighted average cost of capital (WACC) were
used as the hurdle rate for all divisions, would more conservative or riskier
divisions get a greater share of capital? Explain your reasoning. What are two
techniques that you could use to develop a rough estimate for each division’s
cost of capital? Your initial response should be 200 to 250 words.
Guided
Response: Review several of your classmates’ posts. Respond to at least two
classmates by sharing whether you agree or disagree with their view of the use
of the company’s capital. Explain your reasoning.