Company Cost of Capital and Leverage: A Simplified Textbook Relationship Revisited
Abstract In this paper, we revisit a frequently employed simplification within the WACC approach that company cost of capital $$k_{V}$$ k V is supposed to be invariant to the debt ratio and therefore equal to the unlevered cost $$k_{U}$$ k U . Even though we know from Miles and Ezzell (1980) that $$...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Springer
2023-04-01
|
| Series: | Schmalenbach Journal of Business Research |
| Subjects: | |
| Online Access: | https://doi.org/10.1007/s41471-022-00144-w |