Slide MGT204 Slide12

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McGraw-Hill Ryerson © 2003 McGraw–Hill Ryerson Limited

Corporate Finance

Ross  Westerfield  Jaffe _{Sixth Edition}

12

Chapter Twelve

Risk, Cost of Capital,

and Capital Budgeting

Prepared by Gady Jacoby

University of Manitoba and

Sebouh Aintablian

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McGraw-Hill Ryerson © 2003 McGraw–Hill Ryerson Limited

Chapter Outline

12.1 The Cost of Equity Capital 12.2 Estimation of Beta

12.3 Determinants of Beta

12.4 Extensions of the Basic Model

12.5 Estimating Bombardier’s Cost of Capital 12.6 Reducing the Cost of Capital