10-5 The WACC is a weighted average of the costs of debt, preferred stock, and common equity. Would the WACC be different if the equity for the coming year will all come in the form of retained earnings versus some equity from the sale of new common stock? Would the calculated WACC depend in any on the size of the capital budget? How might dividend policy affect the WACC?
Fundamentals of Financial Management By Eugene F. Brigham, Joel F. Houston 12ed
DQ3-WACC
10-5 The WACC is a weighted average of the costs of debt, preferred stock, and common equity. Would the WACC be different if the equity for the coming year will all come in the form of retained earnings versus some equity from the sale of new common stock? Would the calculated WACC depend in any on the size of the capital budget? How might dividend policy affect the WACC?
