Capital Structure Equity Market Risk Weighted Average Cost of Capital 
Valutico
FEBRUARY 27, 2024
Different types of discount rates such as risk-free rate, cost of equity, or cost of debt, are used contextually in financial analysis. In DCF analysis, the Weighted Average Cost of Capital (WACC), representing the average return required by all stakeholders, is commonly used as the discount rate.
Andrew Stolz
MARCH 20, 2020
Weight average cost of capital (WACC) is a calculation of a firm’s cost of capital which includes all sources of capital such as common stocks, preferred stocks, and bonds. A firm uses a mix of equity and debt to minimize the cost of capital.
Valutico
OCTOBER 20, 2022
d is the discount rate (which is usually the weighted average cost of capital (WACC), r in our previous example). Ce = Cost of Equity. Rf = Risk-free Rate. Rm – Rf) = Equity Market Risk Premium. Cp = Cost of Equity Premium. Ce = Cost of Equity.
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