Page 42 - 5.2 i. Manac Finance ITC Summarised Notes
P. 42
COST OF CAPITAL
WACC
• WACC represents the return that a company
needs to achieve in order to fully compensate
the debt and equity providers of the company
(it is the cost to finance the company).
• First you should calculate the cost of each
source of finance (cost of equity, preference
shares and debt).
• Then we combine these together to calculate
the total WACC for the company:
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