METHODS OF VALUATION FOR MERGERS AND …

required rates of return on debt and equity, weighted by the proportion these capital sources make up of the firm’s market value. WACC = W d k d(1-T) + W e k e, where: • k d is the interest rate on new debt. • k e is the cost of equity capital (see below). • W d, W e are target percentages of debt and equity (using market values of debt ... ................
................