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1 page/≈275 words
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Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Coursework
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English (U.S.)
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Funding and Risk Assessment. Accounting, Finance, SPSS Coursework

Coursework Instructions:

As we delve further into how a corporation gets its funding and assessing risk, we learn about a few more financial measures. Using our knowledge of financial terms, please answer the following:
What do we mean by a corporation's Weighted Average Cost of Capital?
What is the significance of a corporation or one of its divisions having a positive Economic Value Added?
What would happen to a corporation stock if its actual return on investment (ROI) was higher than its Weighted Average Cost of Capital?
And what would happen to its stock if ROI was consistently lower than its WACC?
By Thursday,
Post your initial response to the above question(s). Cite your learning resources and external resources (eText, videos, other readings, blogs, etc) to support your response. Be sure to apply the formatting style described for this class.
By Sunday,
Read, and respond to two (or more) of your classmates’ posts. Return to the Discussion forum and read responses given to you by other students. Continue the dialogue throughout the week. Be sure to adhere to the discussion post guidelines and the Discussion Rubric. To see the Rubric, click on the 3 vertical dots on top of this discussion page, then select "Show Rubric."

Coursework Sample Content Preview:

Funding and Risk Assessment
Your Name
Subject's Name
Professor's Name
Date of Submission
1 What do we mean by a corporation's Weighted Average Cost of Capital?
A Weighted Average Cost of Capital (WACC) expresses the specific value of capital for a particular company with the consideration of the debt costs and equity costs of the company. This involves the particular percentages of both the corporation's debts and equity-based on its particular market value. This is important to determine the ability of a company to allocate funds to conduct projects in the future (Corporate Finance Institution, n.d.; InvestingAnswers, 2019).
2 What is the significance of a corporation or one of its divisions having a positive Economic Value Added?
EVA is used to determine the current performance of the corporation by showing how it can generate profit. This is reflective of whether the invested capital has a good value or not. A positive Economic Value Added (EVA) signifies that the company can utilize the invested funds properly by producing value from them (Chen, 2020; My Accounting Course, n.d.).
3 What would happen to a corporation stock if its actual return on investment (ROI) was higher than its Weighted Average Cost of Capital?
If the return of investment of the corporation is deemed to be of a higher value than the determined WACC of the company, then it will most likely imply a very successful and satisfying the corporation in terms of performance. This distinct difference in two values te...
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