Chapter 13 The Cost of Capital

5.6 WACC (a) Weighted average cost of capital is the average cost of the company’s finance (equity, debentures, bank loans) weighted according to the proportion each element bears to the total pool of capital. (b) A general formula for the WACC is as follows. Where ke = the cost of equity. kd = the cost of debt. Ve = the . market value ................
................