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Big4WallStreet Finance Blog — Cost of Debt

Weighted Average Cost of Capital

Capital Asset Pricing Model capital structure CAPM Cost of Debt Cost of equity country risk premium CRP Leverage WACC Weighted average cost of capital

The weighted average cost of capital (“WACC”) is the rate of return that investors expect from investing in a given company instead of other companies with similar risk125. The WACC can be calculated by determining its three components: the after-tax cost of debt, the cost of equity and the company’s target capital structure126.

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