Why do we use the WACC in the discounted free cash flow model?
Question:
Why do we use the WACC in the discounted free cash flow model?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (QA)
The Weighted Average Cost of Capital WACC is used in the Discounted Cash Flow DCF model for a specific reason it reflects the cost of capital required ...View the full answer
Answered By
Sheikh Muhammad Ibrahim
During the course of my study, I have worked as a private tutor. I have taught Maths and Physics to O'Level and A'Level students, as well as I have also taught basic engineering courses to my juniors in the university. Engineering intrigues me alot because it a world full of ideas. I have passionately taught students and this made me learn alot. Teaching algebra and basic calculus, from the very basics of it made me very patient. Therefore, I know many tricks to make your work easier for you. I believe that every student has a potential to work himself. I am just here to polish your skills. I am a bright student in my university. My juniors are always happy from me because I help in their assignments and they are never late.
4.90+
14+ Reviews
24+ Question Solved
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780137852581
6th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Question Posted:
Students also viewed these Business questions
-
As a new junior analyst for a large brokerage firm, you are excited to demonstrate the skills you learned in college and prove that you are worth your attractive salary. Your first assignment is to...
-
Case Swimmers Headphones1 Finally! Its the end of 2019 and you are sitting at your new desk in a plush office in north Bogota, with a delicious cup of Colombian coffee. You think about all it took to...
-
Two capillary tubes of the same radius r but of lengths & and 1 are fitted horizontally to the bottom of a tall vessel containing a liquid at constant Pressure head and flowing through these tubes....
-
Maud, a calendar year taxpayer, is the owner of a sole proprietorship that uses the cash method. On February 1, 2016, she leases an office building to use in her business for $120,000 for an 18-month...
-
If an FEV of less than 2.5 L is regarded as showing some functional impairment (occasional breathlessness, inability to climb stairs, etc.), then what is the probability that a currently smoking man...
-
Refer to the Churning Department information for Woodson Dairy in E5-31A. Requirements: 1. What journal entry(s) would have been made during the month to record manufacturing costs? (Use Wages...
-
Weighted-average method, spoilage, equivalent units. (CMA, adapted) Consider the following data for November 2009 from Gray Manufacturing Company, which makes silk pennants and uses a process-costing...
-
a) Money markets are used to trade debt securities and instruments with maturities of less than one year. Identify three characteristics of the money market. (6 marks) b) Explain four reasons for the...
-
Nike had sales of \($36.397\) billion in 2018. Suppose you expected its sales to grow at a rate of 10% in 2023, but then slow by 1% per year to the long-run growth rate that is characteristic of the...
-
Suppose that in July 2022, Nike had EBITDA of \($6,675\) million, excess cash of \($12,997 million,\) \($12,627\) million of debt, and 1573.8 million shares outstanding. a. Using the average...
-
How does a risk-based deposit insurance program solve the moral hazard problem of excessive risk taking by DIs? Is an actuarially fair premium for deposit insurance always consistent with a...
-
Summarise the main points that is covered in this week. 1. Provide summary of your reading list - external resources, websites, book chapters, code libraries, etc. 2. Reflect on the knowledge that...
-
Q6. Based on your understanding, design a PID controller that controls a drone to hover at 50m and explain the function of each block in the controller. 50 m 0 m
-
$ Uncle Rich's farm has costs and revenue as seen in the graph. What is Uncle Rich's profit-maximizing output? profit-maximizing output: What price will Uncle Rich receive per unit at the...
-
Research OFFICE DEPOT Inc using news reports; its website/publications; and government, professional, or scholarly sources. Discuss the company's track record on economic justice and equity. Define...
-
- Given the following data for a company: Equity E 800,000 USD -Debt D=200,000 USD - Invested Capital IC = 1,000,000 USD E/IC-80% - D/IC=20% -Cost of debt k=9% - Beta-1.6 - D/E=0.25 compute the cost...
-
A tank contains 2 kg of nitrogen at 100 K with a quality of 50%. Through a volume flow meter and valve, 0.5 kg is now removed while the temperature remains constant. Find the final state inside the...
-
Draw and label the E and Z isomers for each of the following compounds: 1. CH3CH2CH==CHCH3 2. 3. 4. CH,CH2C CHCH2CH Cl CH3CH2CH2CH2 CH CH2CCCH2CI CHCH3 CH3 HOCH CH CCC CH O-CH C(CH
-
Discuss the Indian financial system in the pre- and post-reform period. What is the strategy adopted by the Reserve Bank of India to maintain financial stability in post reform period? 2. Discuss...
-
The Dutch Water Authority wanted to raise money by selling perpetuities of $123 per year, with the first cash flow paid in one year from today. If the appropriate discount rate is 6.1%, what would...
-
What is the complexity of the following algorithm public int m1(int x[ ]){ int s=0; for (int i=0;i
Study smarter with the SolutionInn App