Los 43.e Flashcards
(5 cards)
1
Q
What are sources of capital?
A
Cash flows
Proceeds from debt and share issues
Proceeds from asset sales
2
Q
What are uses of capital?
A
Asset Purchases
Debt Repayments
Dividend Payments
Share Repurchases
3
Q
What is a Capital Investment
A
A capital investment is where a company invests cash in revenue and shareholder profits
Should earn at least the shareholders required rate of return
4
Q
What is capital structure risk
A
Require rate of return = WACC -> Cost of debt finance + Equity Finance
5
Q
A
