Journal of Financial and Quantitative Analysis Vol. 11 No. 3 1976
Flotation Costs and the Weighted Average Cost of Capital
Abstract
The weighted average cost of capital (Ko) is presented in virtually all textbooks in financial management and capital budgeting as a practical concept fundamental to the actual selection of optimal financial and investment alternatives. As often employed Ko can be defined aswhereKo = the weighted average cost of capital, Ks = the cost of equity capital, Kb = the cost of debt capital, S = the market value of the firm's equity, B = the market value of the firm's debt, andV = S + B, the total market value of the firm.
- DOI
- 10.2307/2330416
- Volume
- 11
- Issue
- 3
- Pages
- 403
- Sources
- crossref openalex