giants2010

Do we use book value or fair value of debt+equity?

I think it's book value?

redskins44

Thanks Dreary, didn't see that post.

tarunajwani

Thanks all. I understand that completely, but where does the $200,000 from on #34 EOC Q. Reading 29...

chandsingh

I have only seen it based on beginning value of TA. This is not the same as equity + debt, but let us hope they don't get too picky.

President1988

cost of capital=$WACC

mengxu

also think in common sense, you wanna start a business, what do you use to start it?
borrowed money or investors money

defour44

total capital is equity plus debt
think of the wacc formula - it measures the cost of debt and the cost of equity so that's capital