Difference between revisions of "Four ways to weight capital"
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Latest revision as of 19:24, 27 August 2020
In the formula for the WACC:
With: = Weight for debt = Cost of Debt = Weigth for Equity = Cost of Equity
There are for ways to determine weight for capital:
- Book value
- Market value:
- Marginal weights
- Target weights
- Based on ideal capital structure
- Single WACC based on that so called optimal structure