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Description:
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The concept capital cost occupies a position of unquestioned importance in the field of business finance . In recent years , such research found theoretical work has been done in this field by both theorists and practitioners . An evaluation of their results in total would require a paper of considerably greater length and higher degree of of sophistication than is intended here . This paper , is , therefore , confined to an evaluation of the most popular of the more recent theories , namely , the Modigliani Killer propositions .
In order to clearly define the purpose of this paper , it is necessary to state that this paper is intended In no way to derive a new formula for measuring the cost of capital . Its purpose is merely to state the problem and some of the early attempts to solve it , and then to present the Modigliani Killer theory . This theory is explained , and an attempt is made to show how it is being attacked and the measures being taken to defend it . |