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Equity Finance
Cash Flow Statement
Terminal Value Finance
Free Cash Flow
Cash Flow
Preferred Stock
Cash Flow Forecasting
Payback Period
Private Equity
Capital Budgeting
Operating Cash Flow
Mezzanine Capital
Amortization Business
Financial Modeling
Internal Rate of Return
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Corporate Finance
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💼 Do you know what WACC is and why it's so important in finance?
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WACC (weighted average cost of capital) is the average rate a firm pays for its financing from equity and debt and it is central in investment banking for valuation and discounting cash flows. Mathematically it combines equity costs, debt costs and the tax effect of debt as shown in the video. It reflects the required return investors expect given the capital structure and risk profile. In practice it is used as the discount rate in discounted cash flow models to determine enterprise value. WACC
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