CMA Study Group

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  • 1.  Cost of Capital

    Posted 04-24-2022 06:46 PM
    For The purposes of calculating WACC, Cost of debt must be calculated. What interest rate should be included? Is it stated interest or yield (market interest) and why?

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    Noor Jarrar
    Student
    Amman
    Jordan
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  • 2.  RE: Cost of Capital

    Posted 04-25-2022 01:58 PM
    Interest Rate for calculating Cost of debt (Kd) is taken as per question for eg: 8% Debentures are issued, here Interest rate for calculation is 8%
    , This is taken as interest is calculated always on fare value at rate its is actually issued.WACC Cost of Debt(Kd) * % to Total Capital is taken.

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    Anju Poolakkal
    Student
    Calicut
    India
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