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

- Common stock equity
- Preferred stock equity
- Bond debt

Describe how following risks may influence these three sources of financing and influence overall on weighted average cost of capital (WACC):

- Default risk
- Inflation
- Interest rate risk
- Stock and market volatility

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M934923

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