WACC


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WACC

Weighted Average Cost of Capital

A calculation of a company's cost of capital in which every source of capital is weighted in proportion to how much capital it contributes to the company. For example, if 75% of a company's capital comes from stock and 25% comes from debt, measuring the cost of capital weights these accordingly. A high WACC indicates that a company is spending a comparatively large amount of money in order to raise capital, which means that the company may be risky. On the other hand, a low WACC indicates that the company acquires capital cheaply.
References in periodicals archive ?
However, if the project financing is going to materially impact the entity's capital structure, then the WACC should be adjusted accordingly.
EVA = economic value added, NOPAT = net operating profit after tax, WACC = weighted average cost of capital, and IC = invested capital.
0 Strategic Buyer Treat as all cash deal based on after-tax cash flows WACC (Hurdle Rate) 15% Synergies 3% Purchase Price $ 158,000,000 EBITDA Multiple 6.
WACC es el costo de capital de la firma despues de impuesto,
Advancing on the path of accessing long-term financial sources in form of long-term (bank) loans, up to the moment WACC value reaches its minimum - viz.
Este resultado puede diferir en parte con la literatura, pues se recomienda usar siempre el metodo del WACC para determinar una tasa adecuada de descuento; sin embargo, autores como Mian y Pareja (2007) y Sabal (2009) explican como pueden cometerse errores al momento de aplicar el WACC.
Como el WACC es el valor minimo con el que la empresa debe funcionar, si se quisiera realizar un proyecto de inversion ,que arroje un retorno por encima del WACC debe aceptarse, pues agrega valor a la empresa.
The WACC equation predicts that, all else equal, stocks of firms that are investing heavily should earn lower average returns than stocks with low investment, and that stocks with high return-on-equity (ROE) should earn higher average returns than stocks with low ROE.
dollars and then discount them with a WACC expressed in U.