Calculating WACC | WACC Calculation


 
WACC > Best Practices Log in

Calculating WACC | WACC Calculation
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.
 

 
Calculation of WACC
Mudedla Srinivas Kumar
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 sho...
 

 
WACC
Antonio Villa Mardon, Economist, Peru, Member
You need to modify the cost of equity as follows:
CE = RfR + B ((Rm-RfR), being RfR the risk free rate B, the beta Rm Expected market return.
...
 

 
Response to Calculation of WACC
bhavik, Student (MBA), India, Member
Though the calculation is correct, you could have calculated KE using the formula given below i.e. KE = D/PE+G
Where, D = Dividend = the amount ...
 

 
WACC Calculation
Muhammad Wasim, Student (MBA), Pakistan, Member
As regards to this calculation, I got a result of 11.3% instead of 19.2%, without taking into account the beta and risk free return. Can you please co...
 

 
WACC Calculation
Rishi R Koirala, Teacher, Nepal, Member
If you calculate the WACC the following way:
600,000 / 2,000,000 * 10% * (1 - 0.3) + 400,000 / 2,000,000 * 11% + 1,000,000 / 2,000,000 * 14% = 11...
 

 
Calculation of WACC
Blessing Katuka
Normally the following steps must be done to calculate WACC:
- Determine different sources of finance.
- Calculate marginal component costs ...
 

 
Calculation of WACC
Ahid Moghal, Teacher, United Kingdom, Member
I calculate using a tableau with 5 columns. That makes life much easier, and you can see the whole calculation in one go:
The 5 columns are:
...
 

 
 


Special Interest Group Leader

WACC
Summary
Forum

Best Practices
Expert Tips

Resources



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2018 12manage - The Executive Fast Track. V14.1 - Last updated: 20-10-2018. All names of their owners.