You can calculate WACC for any company that is publicly traded (on a US exchange) at http://ThatsWACC.com.
You type in the firm's stock ticker symbol, and the site will pull back the relevant figures from the firm's balance sheet and income statement to generate the cost of debt, cost of capital, and the relative proportions of each.
The weighted average cost of capital is the average cost of a firms financing i.e. both debt and equity financing. Usually debt is much cheaper than equity due to equity investors higher risk appetite. The return they expect hence is much higher than banks and bond holders.
The cost of debt is also net of tax benefit as interest on debt is tax deductible which reduces the tax liability of a firms profits.
Internal factors are:
external factors will be:-
To calculate the weighted average cost of capital is explained in the following formula. You have to get the average of the cost of the sources of finances. Which is the offset by the interest rates the company has to pay.
the rate that a company is expected to pay on average to all its security holders to finance its assets.
One limitation of the weighted average cost of capital is that a firm may possibly end up having a negative Net Present value. This occurs if the weighted average cost of capital gives a discount rate that is too low.
determinants of capital accumulation
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Weighted average cost of capital.
There are many factors that can affect capital structure. The most common factor is a downturn in the economy. A decrease in sales can also affect the capital structure.
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One factor affecting the FDI in India is their economic growth. Also, another factor affecting the FDI in India is their capital preservation.
WACC stands for weighted average cost of capital. So after tax means cost of capital after taxes are taken into account.
WACC stands for weighted average cost of capital. So after tax means cost of capital after taxes are taken into account.
Capital requirement is the amount of capital a financial institution is required to hold. The capital requirement for Universal Banks is four percent of their weighted average calculation.