WACC Weighted Average Cost of Capital | Explained with Example
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- Опубліковано 9 лют 2019
- In this lesson, you will understand what WACC (Weighted Average Cost of Capital) is, why it is important and how to calculate it using the cost of capital from various types of capital and financing sources. We show and explain the WACC formula and how it is calculated using the table.
We also explain what WACC is used for and how it works with the capital structure and the NPV (Net Present Capital). We give helpful tips on WACC and how it compares to IRR (Internal Rate of Return).
Capital Structure explained | How it affects EPS (Earnings Per Share & Profitability): • Capital Structure Expl...
IRR (Internal Rate of Return) Explained with Example: • IRR (Internal Rate of ...
Net Present Value (NPV) Calculation Example Using Excel: • Net Present Value (NPV...
Net Present Value (NPV) Calculation Example Using Table: • Net Present Value (NPV...
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Thank you so much this is crystal clear!
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I spent hours trying to reason this WACC and get it to my brain and thanks to this video I finally get it .... Appreciate it
This channel is quickly becoming my number 1 go to channel for simplifying finance concepts. Thanks a lot
To think I have been battling with this chapter for the past 5 days and you have just simplified it in 17 minutes. Thank you.
Thank you for making it easier to understand. Simplicity is everything.
Beautiful voice, beautiful presentation... If I fail I won't blame you. Thank you
The video was awesome and very much helpful. Thank you!!
Thank you for this!! Very helpful
Wow.. thank you very much. I never imagined this topic could be this simple.
Thank you very much. It's been a week of struggling with understanding WACC. This video has changed it all for me.😀
Well done! simple precise explanations.
Well-explained, Sir. Thank you so much!
Good job.Very clear and well presented
It had to be you who made it all clear....Thanks a lot
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This was really helpful. thank you
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Very very helpful🤘🏻thanks man.
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One of the best explanations I've watch! And I've watched a lot... do you tutor?
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Lifesaver❤🔥
Hi can you please make another example when the book and market values are included. Thank you.
I am currently working on an assignment and I need to calculate the average cost of capital. Can you please assist me as im very confused?
Thanks ! Helped me a lot.
❤very helpful thanks
thank you
To find the cost of debt through wacc, will I have to calculate corporate's tax?
WHICH OF THE LINKS S THE ONE THAT TEACHES HOW TO CALCULATE COST OF CAPITAL
?
Thank you sir 💐 such a great explaination 👍🏻 its help me a lot ✨
I wish you would've added debentures to this. Awesome video tho!
Can you please make a video of . Learning Unit 5: Capital structure and Financial Leverage
2. Learning Unit 6: Degrees of Financial leverage, risk and break-even analysis
3. Learning Unit 7: Ddividend Policy
Great
You the best
very clear , now where another example of calculating wacc where market cost of debt is not given
So helpful.
Glad it helped.
Thank u
by just watching this video I was able to solve problems
Bravo❤
Number one🎉
good
How does wacc link to debt to equity ratio?
Thank you so much for this video ❤️
Well explained, it now makes a lot of sense, I'm enlightened
Which topic easily for distance students... I know only leverage sum ... Capital structure, weighted avg & divident policy
In cost of capital measurement why should the cost of capital be calculated as a weighted average of the various types of funds that a firm generally used, not as the cost of the specific type of capital used during a given year?
Where is the description
I can't find it
I really appreciate this☺️
Kindly show how the formula is applied
hi can you help me pls. if they given previous value and expected future value for preferred stock, how to calculate market value of preferred stock?
Good day, this one should help: ua-cam.com/video/3A_0Sougztk/v-deo.html
Thank you soooo much you explained it in a very easy way, Much love!!!
Hello Sir. How would I calculate the weighted cost if there is a tax rate of 28% ?
You just replace the 35% with the 28% (or whichever tax rate is given to you)
Do you guy offer online classes
Good day, yes we do. Email us at info@counttuts.com
Hi - Please can you assist with explanation and example on the following question.
Trendy Limited uses a combination of shares and debt in their capital structure.
There are 2 million R1 ordinary shares in issue and the current market price is R2.50 per share. The latest dividend paid was 40 cents and a 9% average growth for the past six years was maintained.
The company has 1 000 000 R2, 8% preference shares with a market price of R1.80 per share.
Trendy Limited has a public traded debt with a face value of R2 million. The coupon rate of the debenture is 7% and the current yield to maturity of 10%. The debenture has 6 years to maturity
They also have a bank overdraft of R600 000 due in 3 years’ time and interest is charged at 15% per annum.
Additional information:
• • Trendy Limited has a beta of 2.1, a risk-free rate of 7% and a return on the market of 16%.
• • Company tax rate is 30%.
Required:
4.1 Calculate the weighted average cost of capital, using the Gordon Growth Model to calculate the cost of equity. (22)
4.2 Calculate the cost of equity, using the Capital Asset Pricing Model. (3)
thank you