Concept card Finance

Weighted Average Cost of Capital

Blended cost of all funding.

Difficulty: Advanced Learning path: Cost of Capital, Working Capital

Explanation

WACC হলো equity ও debt-এর cost-এর weighted average, যেখানে weight হলো capital structure-এ তাদের অনুপাত। এটা investment appraisal-এ discount rate হিসেবে ব্যবহৃত হয়।

Example

A company with 60% equity at 14% and 40% debt at 9% has a WACC of about 12%.

Weighted Average Cost of Capital

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