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View Full Version : Weighted Average Cost of Capital


poohndumbo28
Nov 22, 2009, 09:31 AM
How do I calculate the weighted average cost of capital?

dileepasampath
Nov 22, 2009, 09:03 PM
In order to calculate Weighted Average Cost of Capital (WACC) first you need to find out the costs for individual component of capital. (cost of Ordinary shares, cost of preference shares, cost of debentures, cost of loan etc.. ) Then take the average of all such costs, based on the value (market or book) of each of cpital componants. That is the WACC.