WACC Application



WACC Application

WACC

Cost of Capital shows the cost the company has to pay on its mode of financing. It could be either debt or equity or combination of both. The company calculates Weighted Average Cost of Capital for calculating the total cost of debt and equity. This weighted average cost of capital is used as a discount rate to find out the value of investment. The weighted average cost of capital indicates the average relative cost of capital involved in the financing of investments by the company. Individual component of capital in the financing of investment may vary from company ...