WACC calculation — OpenTuition Forums

TTin9y ago

Hello Sir, June 2014, exam question Q1, Cantor Group, evaluate EVA , when calculate WACC, but D/E ratio is 30%, how to calculate ? Thanks

kengarrettTutor9y ago#1

D/E of 30% means a ratio of debt 30, equity 100. Total capital employed is therefore 130. To calculate WACC you would therefore use Cost of debt x 30/130 + Cost of equity x 100/130

TTin9y ago#2

Thanks you so much Sir, WACC explanation. I am very clear and can calculate these whatever come up in question.

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