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International Financing Cost of Capital

2. Lecture Outline. Cost of Capital WACC (revision?)Cost of Capital for MNEsIlliquid/Segmented MarketsSourcing Equity GloballySourcing Debt Globally. 3. A firm normally finds its weighted average cost of capital (WACC) by combining the cost of equity with the cost of debt in proportion to th

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International Financing Cost of Capital

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    1. International Financing & Cost of Capital Reading: Chapters 11 (pg 373-392), 12 & 13 (443-454)

    2. 2 Lecture Outline Cost of Capital – WACC (revision?) Cost of Capital for MNEs Illiquid/Segmented Markets Sourcing Equity Globally Sourcing Debt Globally

    3. 3 A firm normally finds its weighted average cost of capital (WACC) by combining the cost of equity with the cost of debt in proportion to the relative weight of each in the firm’s optimal long-term financial structure: kWACC = ke E + kd(1-t) D V V

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