(Answered) Companies seek the lowest average rate of financing costs

Finance

Companies seek the lowest average rate of financing costs to capitalize the business. Common sources of financing are as follows:

Common stock equity

Preferred stock equity

Bond debt

Explain how the following risks may affect these 3 sources of financing in international capital markets. In addition, explain how these risks may influence a company's international weighted average cost of capital (WACC):

Default risk

Inflation

Interest rate risk

Stock and market volatility

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Financial Management, Finance

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