When we calculate WACC, we need to identify many variables. We need to identify the weight of
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When we calculate WACC, we need to identify many variables. We need to identify the weight of equity, the weight of debt, the cost of equity, and the cost of debt. If we use CAPM to identify the cost of equity, we need to find beta, risk-free rate, and market risk premium.
If we use Dividend Discount Model, we need to estimate the future growth rate. And It's not easy to identify all of these variables, can you rank the top 3 hardest variables to identify, and Explain why?
Course - Financial Management and Markets
Textbook and/or Course Materials: Corporate Finance by Ross, Westerfield, Jaffe, and Jordan, 13th edition, McGraw-Hill/Irwin.
Related Book For
Fundamentals of Financial Management
ISBN: 978-1337395250
15th edition
Authors: Eugene F. Brigham, Joel F. Houston
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