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Floating rate debt

This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.

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May 26, 2014 at 9:13 am #170880
hasanali95
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Just curious to know how we would calculate WACC when the co. has a floating rate debt?
May 26, 2014 at 6:57 pm #171029
John Moffat
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For exams you would use a forecast ‘average’ rate.
In practice you would probably calculate the WACC (and therefore the NPV) using different possible rates and then use judgement as to whether or not to risk investing.
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