Investment activity 5,6,7 - Bilocaia Svetlana

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Topic 6. The Cost of Capital (4/4) 6.1. The concept of the cost of capital 6.2. The cost of each capital components. 6.3. The WACC. 6.4. The marginal cost of capital and investment decisions 6.5. The optimum capital structure 6.6. Theories of Capital Structure BREALEY, R.A., MYERS, S.C., MARCUS, A. J. Fundamentals of Corporate Finance, Third Edition, University of Phoenix, McGraw-Hill Primis, Custom Publishing, 2001 BERK, J., DeMARZO, P., HARFORD J. Fundamentals of Corporate Finance, Second Edition, Prentice Hall, 2012 Pearson Education, Inc. BREALEY, R., MYERS, S., FRANKLIN A. Principles of Corporate Finance, Kindle edition, 2007 ROSS S., WESTERFIELD R., JORDAN B. Fundamentals of Corporate Finance, Volume 1 Standard Edition, McGraw-Hill/Irwin Series in Finance, Insurance, and Real Estate) 10th Edition 6.1. The concept of the cost of capital The cost of capital represents the overall cost of financing to the firm. - The cost of capital is the required rate of return that a firm