Question
We learned that WACC is the weighted average of cost of debt and cost of equity. Weights of debt and equity should be based on
We learned that WACC is the weighted average of cost of debt and cost of equity. Weights of debt and equity should be based on market value, not book value. If you make a mistake and use the book value, will you overestimate or underestimate WACC? Explain.
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Fundamentals Of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
14th Edition
0135175216, 978-0135175217
