How is the WACC for a firm calculated?

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Fundamentals of corporate finance

ISBN: 978-0470876442

2nd Edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

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Question Posted: Jun 12, 2012 12:55 AM

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Consider the WACC for a firm that pays taxes. Explain what a firms best course of action would be to minimize its WACC and thereby maximize the firm value. Use the WACC formula for your explanation.
What does the WACC for a firm tell us?
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How is the WACC for a firm calculated?

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The WACC is calculated as the weighted average of the different types ...View the full answer

Fundamentals of corporate finance

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