Managerial Decisions and the Weighted Average Cost of Capital
DOI:
https://doi.org/10.58886/jfi.v6i2.2406Abstract
This paper explores the relationship between the weighted average cost of capital (WACC) of a company and its marginal cost of capital. We adopt the classic economic theory of production to shed light into the conditions upon which WACC can be safely treated as the marginal cost of a company. Any violations of these conditions will lead a company to reach suboptimal capital budgeting decisions.
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Published
2008-12-31
How to Cite
Wong, Matthew. 2008. “Managerial Decisions and the Weighted Average Cost of Capital”. Journal of Finance Issues 6 (2):95-104. https://doi.org/10.58886/jfi.v6i2.2406.
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Original Article