Scribd
Upload
52 views3 pages

Value Weight Required Rate of Return

The document provides the weighted average cost of capital (WACC) calculation for a company with an equity value of $194,755, a debt value of $129,678, a total value of $324,433. Using a 60% equity weighting and 40% debt weighting, the WACC is calculated to be 7.15%, based on the required rates of return for equity of 8.57% and debt of 4.42%.

Uploaded by

ravinyse
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
52 views3 pages

Value Weight Required Rate of Return

The document provides the weighted average cost of capital (WACC) calculation for a company with an equity value of $194,755, a debt value of $129,678, a total value of $324,433. Using a 60% equity weighting and 40% debt weighting, the WACC is calculated to be 7.15%, based on the required rates of return for equity of 8.57% and debt of 4.42%.

Uploaded by

ravinyse
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Weighted Average Cost of Capital (WACC)

Value Weight Required rate of return


Equity (fair value) 194,755 0.6 8.57%
Debt (fair value) 129,678 0.4 4.42%
324,433 1
Equity (fair value) = No. shares of common stock outstanding × Current share price

WACC =

Rf 2.98 2.98
Market Return 12.52 12.52
beta 0.59 0.59
expected return 8.57
E / (E + D) * Cost of Equity + D / (E + D) * Cost of Debt *

-0.1538457432
(1 - Tax Rate)

You might also like