The cost of capital for a private firm

What is your decision if the base and best case NPV is positive while the worst case NPV is negative?
Discussion #1
Scenario analysis helps us prepare for surprises. Suppose, we find positive NPVs for base and best case scenario. However, the NPV for the worst case scenario is negative. Should we accept or reject the project? What kind of additional information would help you make decision?

How should we evaluate the cost of capital for a private firm?
Discussion #2
We have learnt how to find the cost of capital and such calculations heavily rely on the public market information. What if your boss is asking to you compute the cost of capital for a private firm? What would you do? How should we find the cost of capital for a private firm?

Sample Solution

find the cost of your paper

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