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When Partners in a Strategic Alliance Form a New Business

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When partners in a strategic alliance form a new business unit in which each takes an ownership position,they have created a:


Definitions:

Coupon Rate

The interest rate that a bond issuer will pay to the bondholder on the face value of the bond.

Market Price

The live market price at which an asset or service can be bought or sold.

Weighted Average Cost of Capital (WACC)

A calculation of a company's cost of capital, weighted by the proportion of each source of capital (debt and equity), used to see how much interest the company pays for every dollar it finances.

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