what is wacc and how it is use?

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what is wacc and how it is use?..

Answer / dinesh

WACC stands for weighted average cost of capital WACC is the average of the costs of sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.

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what is wacc and how it is use?..

Answer / swarnlata

wacc means Weighted Average Cost of Capital.It is used by
using a formula-
WACC = E/(D+E)*Re + D/(D+E)*Rd*(1-t)

E = amount of equity the company has
D = amount of debt the company has
Re = cost of equity
Rd = cost of debt
t = corporate tax rate

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what is wacc and how it is use?..

Answer / neerajkumar.che

Hello Freinds,
As WACC standfor weighted Average cost of capital.As you
know capital structure of the company is mix of long term
debt and equity and company tries to maximize the
shareholders wealth by adopting the proper mix of debt and
equity.So WACC is calculates based on the cost of the
capital of eaach component multiplied by its weight.It is
the minimum cost of capital to the company which discounted
the future inflow againts the inital outflow to have
maximum value to company.

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