Revision 5 – Cost of Capital

The firm’s WACC is the cost of Capital for the firm’s mixture of debt and stock in their capital structure. WACC = wd (cost of debt) + ws (cost of stock/RE) + wp (cost of pf. stock) So now we need to calculate these to find the WACC! wd. = weight of debt (i.e. fraction of debt in the firm’s capital structure) ws. ................
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