3.1 Chapter Three Learning Outcomes

In this chapter, you will:

• Learn that Corporate Capital Costs and Investors’ Returns are the same.
• Explore each of four Capital Components and their respective cost rankings.
• Provide the individual Capital Components’ respective costs.
• Define and Calculate the Weighted-Average Cost of Capital (WACC).
• Identify the various factors that will affect a firm’s “WACC” and the quantitative effects of the factors.
• Introduce how a project’s Marginal Cost of Capital is utilized in decision-making.
• Achieve a high degree of expertise with the Capital Asset Pricing Model.