Weighted Average Cost Of Capital (WACC finance)

Weighted Average Cost Of Capital -  The calculation of your company's cost of capital, in which each capital category weighted in proportion. All sources-common stock, preferred stock shares, bonds and other long-term debt-are considered in a WACC calculation. All others is same, WACC of a company increases as the beta, and the rate of return on own capital increase, such as an increase in the WACC notes a reduction in the valuation and higher risk.

Weighted Average Cost Of Capital (WACC) can be calculated using the following formula as given below,

Here Re is the cost of equity and Rd is the cost of debt.