Question
Langtry Falls Expansion Plan: The WACC is the weighted average of what it costs to raise capital. Essentially, the opportunity cost of capital. It is
Langtry Falls Expansion Plan:
The WACC is the weighted average of what it costs to raise capital. Essentially, the opportunity cost of capital. It is not technically the same thing as the hurdle rate for investment decision, but it is often used to make those decisions. It is also the discount-rate by which future cash flows should be valued. It is not the IRR, since that Internal rate of return is just the discount rate that sets the NPV of cash flows equal to zero (as compared to the required investment). Having said all of this, what do you think is the WACC for the potential expansion project of Langtry Falls?
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