Valutico

FEBRUARY 27, 2024

Weighted Average Cost of Capital (WACC): WACC is the average rate of return a company is expected to provide to all its investors, including equity and debt holders. It is calculated by weighting the cost of equity and cost of debt based on their proportions in the capital structure.

Discounted Cash Flow 52

Discounted Cash Flow Risk Premium Risk-free Rate Weighted Average Cost of Capital 52

Andrew Stolz

MARCH 20, 2020

The formula implies the return an investor expects from a risk-free investment plus the return from the stock in relation to market volatility. The market risk premium is calculated from a market rate of return less a risk-free rate. It tends to add debt beyond the optimal capital structure.

Beta 52

Beta Capital Structure Risk-free Rate Weighted Average Cost of Capital 52

Appraiser Newsroom

JULY 5, 2022

Dr. Henry has over 20 years of diverse experience in the fields of business economics, consulting/advisory services, interest rate and market risk modeling, and government affairs. He is a member of several organizations including ASA, AICPA, and the CFA Institute.

Business Valuation 40

Business Valuation Intangible Assets Appraisal Finance 40

Valutico

OCTOBER 20, 2022

Rf = Risk-free Rate. Rm – Rf) = Equity Market Risk Premium. DCF WACC—similar to the above except that it calculates a different WACC in each forecast period based on a changing capital structure (D/E) and thus a changing beta in each period. Ce = Cost of Equity. B = Beta. (Rm Cp = Cost of Equity Premium.

Discounted Cash Flow 52

Discounted Cash Flow Terminal Value Weighted Average Cost of Capital Net Present Value 52