Average cost of capital

Average cost of capital

A firm's required payout to bondholders and stockholders expressed as a percentage of capital contributed to the firm. Average cost of capital is computed by dividing the total required cost of capital by the total amount of contributed capital.

Average Cost of Capital

The total amount that a company must pay in dividends on preferred stock and in coupons on bonds, expressed as a percentage of the total amount raised through the issue of stock and bonds. This shows what a company must spend in order to raise the capital it needs to maintain or expand operations.
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DCF, which used a weighted average cost of capital of 12 percent, yielded a fair value within the P5.00 to P5.80 and when cross-checked with market approach intersected at a value to P5.00 to P5.70, or an equity value equivalent to P79.1 billion to P90.2 billion.
While this still exceeds the average cost of capital (estimated at 7.3 per cent), the buffer is extremely thin.
While this still exceeds the average cost of capital (estimated at 7.3%), the buffer is extremely thin.
On an adjusted basis, PDC generated a return on capital employed of ~3%, materially below the company's weighted average cost of capital, continuing an unimpressive trend.
The Chief Executive in Council (January 8) endorsed the review outcome of the Fare Adjustment Arrangements for franchised buses (FAA), and approved that the factors which make up the FAA should remain intact, while the Productivity Factor value used in the supportable fare adjustment rate formula and the weighted average cost of capital (WACC) should be adjusted.
According to the research note released, Ibn Sina's fair value review was supported by a 4% increase in the company's earnings before interest, tax, depreciation and amortization (EBITDA) margin (compared to the previous forecast) during the period 2018/22, the valuation model using discounted cash flows has been extended for five years, a higher final weighted average cost of capital.
Peabody believes the acquisition is consistent with the company's previously said investment filters: maintain financial strength; fit within the company's strategic focus areas of the PRB, ILB, seaborne met and seaborne thermal; provide expected returns above Peabody's weighted average cost of capital with a reasonable payback period; bring about tangible synergies; and create value for the company's shareholders.
"While pricing terms and conditions did stabilize, they continue to remain below expectations for producing a reasonable risk-adjusted return relative to the average cost of capital for most reinsurers."
Despite these positive moves, profitability metrics remain subdued with return on invested capital (ROIC) to remain below weighted average cost of capital (WACC) until at least 2023.
For 2017-2018, the approved weighted average cost of capital (WACC) is set at 9.22% nominal pre-tax, while by beginning of 2019 the ordinary tariff review is expected to be updated by the Greek Regulatory Authority for Energy (RAE) for the following four years.
The new revised tariffs regime would see the fixed rate used to determine the rate of return on assets and profitability be changed with a weighted average cost of capital (WACC), reported The News.
The gas utilities, Sui Northern Gas Co (SNGP PA +5.0%) and Sui Southern Gas Co (SSGC PA +5.0%), were in the limelight (closing at their respective upper price limits and accounting for 12% of the total market activity) after the Oil and Gas Regulatory Authority (Ogra) issued a tariff regime whereby the Return on Asset (ROA) for the companies would be computed on the basis of Weighted Average Cost of Capital (WACC).