Cost of Capital Name Institution Professor Course Date Abstract This paper explains the concept of cost of capital in the business and expounds on the factors which affect it. It also briefly discusses the common problems which various firms experience in their calculation of the cost of capital leading to the making of unprecedented decisions. Through the discussion of the cost of capital in this paper it is established that it plays an important role in influencing the nature of decisions made by investors and lenders. It is therefore clear that its calculation is very important as it forms the basis for the determination of the capital amount to be invested in a project. According to this study there are four major factors which impacts on the cost of capital and they include: market conditions demand and supply of capital the volume of finance and unsystematic risks. All these Hendricks K.B. and Singhal V.W. 2005. An empirical evaluation of the impact of supply chain disruptions on long‐run stock price performance and equity risk of the company. Production and Operations control 15(1) pp.35-52. Li X. 2015. Accounting conservatism and the cost of capital: An international analysis. Journal of Business Finance & Accounting 42(5-6) pp.555-582. Modigliani F. and Miller M.H. 1958. The cost of capital corporation finance and the theory of investment. The American economic review 48(3) pp.261-297. Modigliani F. and Miller M.H. 2013. Corporate income taxes and the cost of capital: a correction. The American economic review pp.429-444. Ortiz-Molina H. and Phillips G.M. 2014. Real asset illiquidity and the cost of capital. Journal of Financial and Quantitative Analysis 49(1) pp.1-32. Palliam R. 2005. Estimating the cost of capital: considerations for small business. The Journal of Risk Finance 6(4) pp.335-340. Ward C. 1999. Estimating the cost of capital. Journal of Corporate Real Estate 1(3) pp.287-293. [...]
I am a Masters Student. I have attached the subject unit outline. Refer to page 6 and 7 of the unit outline regarding instructions for the assignment. I have also attached the pdf file for the course book if needed just in case. I have also attached a finance essay done by a past friend for you to get an idea regarding the format. His topic and word limit was different though. Need Harvard style referencing. Even though the assignment instructions states to use minimum 6 journal articles for references, I would like to see more than that that. You can also refer to the student essay I have attached and see the kind of references used by the student. Also, professor said he doesn't like to see investopedia.com and businessdictionary.com as references for websites. Remember that the Word limit is inclusive of abstract, references, and appendices. The word count is 2000 (+-10%) Need this done by this Sunday afternoon please.