When calculating the weighted average cost of capital (WACC), should we use market values or the statement
Question:
When calculating the weighted average cost of capital (WACC), should we use market values or the statement of financial position values as the weights of debt and equity?
Explain your response.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (2 reviews)
Market values should be used because WACC is mean...View the full answer
Answered By
PALASH JHANWAR
I am a Chartered Accountant with AIR 45 in CA - IPCC. I am a Merit Holder ( B.Com ). The following is my educational details.
PLEASE ACCESS MY RESUME FROM THE FOLLOWING LINK: https://drive.google.com/file/d/1hYR1uch-ff6MRC_cDB07K6VqY9kQ3SFL/view?usp=sharing
3.80+
3+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
The weighted average cost of capital (WACC) is the weighted average after-tax cost of an organization's various sources of financing, such as debt and stock. In this chapter, you learned that WACC is...
-
Assignment Overview This project consists of determining the current weighted average cost of capital for a publicly traded firm. Please read the information below. The Problem As new analysts in the...
-
During the last few years, Jana Industries has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital costs have been declining, and the company...
-
On the basis of the given scenario create a file Expenses.txt, Open the file and copy it into another Expenses2.txt, Also show output on screen A college has announced a total budget of 50,000Rs.for...
-
More people in high-income countries than in low-income countries tend to believe that rapid rates of economic growth are not desirable. Recall the concept of a "normal good". Does this concept...
-
A town has four TV repairmen. In the first week of September four TV sets break and their owners call repairmen chosen at random. Find the probability that the number of repairmen who have jobs is 1,...
-
4.3 (a) If you are using the software R to solve these exercises, use the method given in Section 2.8 to obtain SEs for the following results from the split-plot experiment to compare commercial...
-
Lightning Industries specializes in making Flash, a high-moisture, low-alkaline wax used to protect and preserve skis. The company began producing a new, improved brand of Flash on January 1....
-
Carryable CDs has the following inventory data: Nov. 1 8 17 25 Inventory Purchase Purchase Purchase 31 units @ $6.20 each 125 units @ $6.70 each 62 units $6.55 each 94 units @ $6.90 each A physical...
-
AmeriPlas, Inc., produces 20-ounce plastic drinking cups that are embossed with the names of prominent beers and soft drinks. a. Prepare a time-series plot of the sales data. Does there appear to be...
-
Vocalise plc has recently assessed a new capital investment project that will expand its activities. This project has an estimated expected net present value of 4 million. This will require finance...
-
Da Silva plcs shares are not traded in any recognised market. Its sole activity is saloon car hire. It is financed by a combination of 2 million 0.50 ordinary shares and a 1.5 million bank loan. Very...
-
Estimate the 25-year and the 100-year peak discharges using the data in Table 13. 12. The map skew for this location is 0.015. TABLE 13.12 Annual Peak Discharge in Problem 8 Year 1962 Annual Peak...
-
What Is Chemical Energy? Definition and Examples
-
The fundamental concern of computer science is determining what can and cannot be automated. The earliest foundations of what would become computer science predate the invention of the modern digital...
-
History of the United States
-
United States History Pearl Harbor attack
-
A national homebuilder builds single family homes and condominium style townhouses. The Excel file House Sales provides information on the selling price, lot cost, type of home, and region of the...
-
A bar of length = 1 has one fixed and one free end and stiffness function c(x) = 1 - x. Find the displacement when subjected to a unit force. Pay careful attention to the boundary condition at the...
-
Diversified Industries plc (DI) is a business that has interests in engineering, caravan manufacturing and a chain of shops selling car accessories. DI has recently been approached by the directors...
-
Diversified Industries plc (DI) is a business that has interests in engineering, caravan manufacturing and a chain of shops selling car accessories. DI has recently been approached by the directors...
-
(a) Calculate the Z-scores for Ali plc and Bhaskar plc (see SAQ 7.1 on pages 250 251), using the Altman model set out on page 280. (b) Comment on the Z-scores for the two businesses and the validity...
-
What is the risk profile of your company? (How much overall risk is there in this firm? Where is this risk coming from (market, firm, industry or currency)? (APPLE COMPANY LATEST DATA) How is the...
-
What is the duration for the following bond with annual payments? 5.6300 5.7957 4.9894 5.1910 5.3806
-
DOLLAR TREE GROCERY OUTLET Short-Term Liquidity 2021 2022 2021 2022 Current Ratio 1.35 1.51 1.86 1.67 Quick Ratio 0.24 0.15 0.63 0.42 Cash Ratio Cash Conversion Cycle 34.78 45.75 19.41 21.61 Days...
Study smarter with the SolutionInn App