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WACC > Best Practices

Krisztina
I have been asked to calculate the WACC using the following info: Capital structure: Ordinary shares (fully paid) :1000000, preference shares: (11%) 400000, debentures: (10%) 600000. The ordinary share holders expect a divident of 14% per year. Corporate tax is estimated at 30%. --- I did a bit of work on the above challenge, but I'm not sure if I'm on the right track... could someone point out if there are any mistakes? (600,000/2.000,000 * 10% * (1-30%)) + (400,000/2.000,000 * 11%) + (1.000,000/2.000,000 * 14%) = 19.2% Thank you for any help provided. (...) Read more? Sign up for free

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  Mudedla Srinivas Kumar
 

Calculation of WACC

Though your calculation seems O.K. factoring for Cost of Equity would have made your calculation more refined. which is as follows: Cost of Equity should be : Risk Free return + Beta*Market price.

  Antonio Villa Mardon, Economist, Peru
 

WACC

You need to modify the cost of equity as follows: (...)

  bhavik
 

Response to Calculation of WACC

Though the calculation is correct, you could have (...)

  Muhammad Wasim, Student (MBA), Pakistan
 

WACC Calculation

As regards to this calculation, I got a result of (...)

  Rishi R Koirala, Teacher, Nepal
 

WACC Calculation

If you calculate the WACC the following way: 600, (...)

  Blessing Katuka
 

Calculation of WACC

Normally the following steps must be done to calcu (...)

  Ahid Moghal, Teacher, United Kingdom
 

Calculation of WACC

I calculate using a tableau with 5 columns. That m (...)

 
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