what is wacc and how it is use?

Question Posted / prrrraffff

3 Answers
6012 Views
I also Faced
E-Mail Answers

Answers were Sorted based on User's Feedback

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.

Is This Answer Correct ?

4 Yes

0 No

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

Is This Answer Correct ?

1 Yes

0 No

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.

Is This Answer Correct ?

0 Yes

1 No

Post New Answer

More Banking Finance Interview Questions

What Is An Option In Derivative Market?

0 Answers

What are Funds Flow Statements?

34 Answers

What is Statutory Company?

0 Answers Joint Stock Company,

How is future growth of SEBI in India and any hurdles to it ?

0 Answers SEBI,

What is the Government's contribution to IT in India?

0 Answers IBPS,

what is entry load? what is exit load?

6 Answers Capital IQ,

difference Between P&L A/c and Balance Sheet?

13 Answers

i am 28 years old. how can i get a best degree only for commerce and accounting?i mean like b com but i dont want to study subjects other than subjects that come under commerce and accounting for b.com

1 Answers

what is minority interest?

7 Answers

i have finished my mba finance., looking for a job but m not sure about the profile i should go in, can ny1 guide me.. it will be a gr8 help fr me.....

1 Answers

what is authorised capital ?

4 Answers Bank Of America,

What are indirect instruments of monetary policy?

0 Answers

For more Banking Finance Interview Questions Click Here