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1 page/≈275 words
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APA
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Accounting, Finance, SPSS
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English (U.S.)
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8-2 Activity Assignment Cost of Capital

Other (Not Listed) Instructions:

The company is Alphabet Inc Please use only Alphabet Inc please read the questions and filled in the worksheet
Answer the following questions based on your organization chosen for the final project. Write your response in a separate Microsoft Word document:
o Importance of Cost of Capital: Why is cost of capital important to an organization, and what does it measure?
o Meaning of Calculations: How do organizations calculate various costs, and what do these calculations mean to business?
 After completing the written portion, calculate answers to the problems in the worksheet.
Refer to the textbook and other course materials to support your responses.
Rubric
Guidelines for Submission: Your written response should be a 1- to 2-page Microsoft Word document, double spaced, with 12-point Times New Roman font,
one-inch margins, and citations in APA style. You must also complete and submit the Module Eight Activity Worksheet.

Other (Not Listed) Sample Content Preview:

Cost of Capital
Author Name
Institution Affiliation
Cost of capital is one of those major components that help determine the success rate of a business (Harrington, J., & Grabowski, 2014). Investors always want their investments to grow by the cost of capital. So we can say that so the cost of capital helps measure or calculate the discount rate of the cash flow of investment. It clarifies how companies are going to finance their projects and what types of decisions should be made. Ideally, all businesses seek a good balance between their investments and profits while reducing the cost of capital.
In the cost of the capital game, organizations calculate different costs in two ways -- the explicit cost of capital and implicit cost of capital (2015). Implicit cost is an investment opportunity that is given to the investor in order to keep them engaged. On the other hand, the explicit cost is the cost that organizations use for making capital investments, and this is payable to the investor in the form of a strong stock price.
Question 1: Assuming that the riskless rate is 2.3% and the market premium is 5.3%, calculate Zonk’s cost of equity capital:
A. 10.4%
B. 7.69%
C. 11.89%
D. 8.28%
Question 2: Determine the weight on debt capital that should be used to calculate Zonk’s weighted-average cost of capital:
A. 21.7%
B. 21%
C. 50%
D. 58.2%
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