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Determine the WACC for a given firm using what you know about WACC as well as data you can find through research.

1 min read
Posted on 
May 21st, 2023
Home Homework Help Determine the WACC for a given firm using what you know about WACC as well as data you can find through research.

It is your task to find the WACC for any given company using information you have.

In order to calculate the Weighted Average Cost of Capital (WACC) for a given firm, we must first gather all the necessary information regarding their total market value of debt & equity, cost of equity and cost of debt. It is possible to do so by researching financial statements, or consulting with a specialist in the area.

Once this data is obtained, we can then use it to calculate WACC using the following formula: WACC = (E/V)* Re + ((D/V)* Rd) * (1-Tc). Where E represents the market value of equity, V represents total market value of debt & equity, Re is the cost of Equity, D is the market value of debt, Rd is the cost of Debt and Tc stands for tax rate.

For example, if XYZ Corporation has a total market value consisting of $400 million in both debt & equity with a cost

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