Companies seek the lowest average rate of financing costs, Ask an Expert

Management Studies

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

Describe how the following risks may affect these 3 sources of financing and the impact overall on weighted average cost of capital (WACC):

- Default risk

- Inflation

- Interest rate risk

- Stock and market volatility

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Business Management, Management Studies

Category:- Business Management
Reference No.:- M9734001

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