WACC
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Recent papers in WACC
This paper investigates whether there is relationship between fluctuations of enterprise value or capitalization and related changes of WACC and cash flows. The study carried on the sample of some companies from the oil and gas sector,... more
This paper presents a formal derivation of general expressions for Ke and WACC in perpetuities with constant growth, which do not make any assumption on what the proper discount rate is to be applied to the firm’s tax shield, and are... more
Sebagian besar perusahaan, bagaimanapun, dibiayai oleh campuran sekuritas, termasuk saham biasa, obligasi, saham preferen, atau sekuritas lainnya. Masing-masing sekuritas memiliki risiko yang berbeda, dan oleh karena itu investor di... more
A financial analysis of Under-Armour from 2009 until 2011, including a comparison with industry competitor Nike. Report includes brief notes on company history, followed by an analysis of their financial ratios, WACC and Beta calculations.
Abstract: There has been a plethora of literature in recent years on discounted cash flow (DCF) valuation and how to value companies using such techniques. Yet, as demonstrated by Fernandez, all methods produce the same results when... more
In the standard Weighted Average Cost of Capital (WACC) applied to the free cash flow (FCF), we assume that the cost of debt is the market, unsubsidized rate. With debt at the market rate and perfect capital markets, debt only creates... more
Abstract: Although we know there exists a simple approach to solve the circularity between value and the discount rate, known as the Adjusted Present Value proposed by Myers, 1974, it seems that practitioners still rely on the traditional... more
Por meio deste artigo propõe-se a criação de um modelo de análise de balanços denominado de Índice de Especulação de Valor Agregado (IEVA), estabelecido com base em uma formulação matemática que envolve conceitos relacionados com a... more
Based on empirical analyses of US hotels, this study finds that hotel capitalization rate is a complex combination of macroeconomic and asset-class specific variables beyond the cost of capital, capital structure and growth rate. In... more
The CIIF, International Center for Financial Research, is an interdisciplinary center with an international outlook and a focus on teaching and research in finance. It was created at the beginning of 1992 to channel the financial research... more
Terminal Value (aka Horizon Value) is the value of a firm when the firm is expected to grow at a constant rate forever. The method to calculate value a constant-growth firm is sometimes called Capitalization. Currently, and for decades,... more
Abstract: Although we know there exists a simple approach to solve the circularity between value and the discount rate, known as the Adjusted Present Value proposed by Myers, 1974, it seems that practitioners still rely on the traditional... more
A typical approach for valuing finite cash flows is to assume that leverage is constant (usually as target leverage) and the cost of equity, Ke and the Weighted Average Cost of Capital, WACC are also assumed to be constant. For cash flows... more