Calculating WACC and its Importance
Question:
How do you calculate the weighted average cost of capital (WACC)? Why is it important as a cost of capital measure?
Word Count
173
Format
MLA
Answer Preview
Parrino, Kidwell and Bates (2012), state that weighted average cost of capital is the average after tax cost of all the sources of financing that a firm utilizes.
WACC is useful in capital budgeting…