Hello Mr Moffat.
Thank you very much for your great lectures.
Sorry to take your time sir, I am confused about the WACC formula.
There are TWO formulas for WACC.
Formula 1: WACC = Ve * Ke /(Ve+Vd) + Vd * Kd(1-t) /(Ve+Vd)
Formula 2: WACC = Veu(1 - Vdt/(Ve+Vd))
I am confused when I should use them. So far I though they both would lead to the same WACC, but it seems they are not the same. I mean there was a question which use the second formula to calculate the WACC, but when I tried to calculate the WACC with the first one the answer was not the same :(
Thanks
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WACC formula
6y ago#1The second formula you have typed is not a formula for the WACC. If the question you are referring to is either a part exam question or a question in the BPP Revision Kit, then tell me which question and I will explain what they have done.
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