The Weighted Average Cost of Capital (WACC) Has Always Been ‘Mistaken’ as Cost: Financial Management in Shipping Assignment,SP, Singapore

Section A: Research Theory

The weighted average cost of capital (WACC) has always been ‘mistaken’ as cost The WACC may be seen as a required return, derived from the valuation of all the firm’s existing capital.

Broadly speaking, an investor may finance its assets by either debt, equity or a mixture of both. The WACC equation thus contains these two capital components and their proportional weights.

Read Chapter 11/the Cost of Capital and

i. Illustrate the definitions of the WACC and all its components

ii. cite the best video (in your view) in Cengage that depicts this topic

 Section B: Research Case Study

Ship financing is a method of raising funds whereby risks are mitigated by the registration of various forms of collateral and charter fees serve as the principal source of repayment.

You are required to write up a case of ship financing in the industry, the process of ship financing; what was financed, what instrument(s) was used, how funding was obtained, how to ship financing was worked out in the firm and any other information that may be helpful in your case study.