CPA BEC Formulas
CPA BEC Formulas Weighted Average Cost of Capital - ANSWER-(Cost of Equity x % Equity in Cap Structure) + (Weighted Average Cost of Debt x % of Debt in Cap Structure) Weighted Average Cost of Debt - ANSWER-Effective Annual Interest Payments / Debt Outstanding After Tax Cost of Debt - ANSWER-Pretax Cost of Debt x (1 - Tax Rate) Cost of Preferred Stock - ANSWER-Preferred Stock Dividends / Net Proceeds of Preferred Stock CAPM (Cost of Retained Earnings) - ANSWER-Risk-Free Rate + (Beta Coefficient (Market Return - Risk-Free Rate)) DCF - ANSWER-Expected Dividend at the end of One Year / Current Market Value of the Outstanding Common Stock BYRP (Cost of Retained Earnings) - ANSWER-Pretax Cost of LT-Debt + Market Risk Premium Growth Rate - ANSWER-Retention Ratio x Return on Investment Return on Investment - ANSWER-Net Income / AVG Invested Capital Return on Assets - ANSWER-Net Income / Assets Return on Equity (ROE) - ANSWER-Net Income / Shareholders Equity Total Debt to Capital Ratio - ANSWER-Total Debt / Total Capital (liabilities + equity)
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- August 18, 2023
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