Weighted Average Cost of Capital (WACC)

Рет қаралды 769,016

Күн бұрын

This video explains the concept of WACC (the Weighted Average Cost of Capital). An example is provided to demonstrate how to calculate WACC.
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Пікірлер: 198

@ElaWith1L 9 жыл бұрын

This was so confusing in my finance class, but it makes sense to me after watching this video! Thanks!!!

@jayeshramesh9464 9 жыл бұрын

Ela Business and finance essentials?

@ElaWith1L 9 жыл бұрын

principles of finance, actually!

@shivamasnavikhan4990 4 жыл бұрын

Minimun Acceptable Rate of Return & Weighted Average Cost of Capital Calculator: DiscountingRate.com

@tristankason1925 2 жыл бұрын

i guess im asking the wrong place but does any of you know of a way to log back into an instagram account..? I stupidly lost my password. I love any help you can offer me!

@SimonIslit 2 жыл бұрын

same right here, saved by ass!

@imran.jafery 8 жыл бұрын

I'll say this... I have exam tomorrow and i don't have a slightest clue about the subject as i'm a student of computer science. I skipped classes and now i'm doomed. THIS video made do all the WACC related questions. THANK YOU SO MUCH. Now i'm sure if i watch all your videos i'll nail the exams tomorrow :)

@Edspira 8 жыл бұрын

No problem! I hope you do great on your exam!!

@AnvayGaikwad 7 жыл бұрын

how did ur exam went??

@imran.jafery 7 жыл бұрын

It went better than expected even though 90% was theory. My concepts were clear.

@NabeelAhmed-ln3fw 6 жыл бұрын

Imran Jafery .....what happened in your exam

@dreamysleepyzzz Жыл бұрын

woah, u make it so so much more clearer, its like you turn the whole equation into text, i have 0 idea what was my prof was talking. Thank you so much

@karlau1084 4 жыл бұрын

Soooo much better than my text book! Thank You!! Love all the videos. I could almost like this stuff with you teaching it!

@johndowney6923 6 жыл бұрын

My professor said to the class in supply chain management, " what do you all know about weighted averaged cost of capital?". To which I responded, " It's WACC!".

@Edspira 6 жыл бұрын

Ha! Great response. It's always best to be ahead of the class :)

@LosehinasTocaLife 5 жыл бұрын

John Downey 😂😂

@bornventureomondi4827 3 жыл бұрын

🤣🤣🤣lol

@ArgemoneRose_ 6 жыл бұрын

I have a small playlist of your videos for everything i need for my financial mgmt class and you have been helping me pass! Thanks so much.

@shivamasnavikhan4990 4 жыл бұрын

KatCJ Minimun Acceptable Rate of Return & Weighted Average Cost of Capital Calculator: DiscountingRate.com

@jaydgreen1 5 жыл бұрын

Thank you!! The video chat my professor did cut out during this part of the lesson. This may have saved my but. Easy to understand and to the point. Subbed!

@maxpower8429 7 жыл бұрын

Currently working my way through the CPA program in Canada and these video's are a great resource. Thanks for uploading

@Edspira 7 жыл бұрын

No problem!

@persevere9834 10 жыл бұрын

You have the best explanation and example of how to calculate WACC! Thank you!

@normanmwansa8067 3 жыл бұрын

Thanks for the video

@BaziMedfu 2 жыл бұрын

u have no idea how mach this videos helped for my finals...much respect to u sir🙏

@MrHariharan321 6 жыл бұрын

Very good explanation. Thank you so much for the simple understanding of WACC.

@lisamccray6481 3 жыл бұрын

I'm a freshman when it comes to accounting. I'm starting to get the lingo and concepts. Thanks to people like you. Very much appreciated.

@albertbala3235 Жыл бұрын

Welcome budy

@zvoyarakel2842 6 жыл бұрын

God bless you and your family for such a beautiful explanation! 10/10 Saved me from going crazy now i fully understand whats going on in this messy formula !

@Edspira 6 жыл бұрын

No problem. I'm glad this video was able to help you!

@juliarot3335 7 жыл бұрын

Thanks for the video. I've skipped this so many times because it seemed too complicated but now I finally get it.

@Edspira 7 жыл бұрын

Excellent!

@bhagatsingh5019 8 жыл бұрын

Thank you for your all beautifully explained videos.

@heavensplayer 8 жыл бұрын

It's not even a challenge when you're given all the numbers like this.

@shainaversi4159 5 жыл бұрын

God ikr 😂

@jackpot1000grand 5 жыл бұрын

@@AMamaBearsMission lol

@tomwaters5115 5 жыл бұрын

@@AMamaBearsMission wow... you need help honey

@wynandoberholzer6777 5 жыл бұрын

@@AMamaBearsMission Jesus Christ....

@jangzterrizer9405 4 жыл бұрын

@@AMamaBearsMission Damn Karen this is internet

@hamzaansari2982 4 жыл бұрын

Your videos are helpful in my ACCA preparations thanks alot mate

@lucas1628 9 жыл бұрын

Well this video has saved my ass for my exam, thank you!

@Youngmessi01 Жыл бұрын

Very explicit and straight to the point. I wish you come to our university to lecture Financial Management

@nostressstef8924 3 ай бұрын

simple and straight to the point

@jack_crutons 4 жыл бұрын

I love these videos because we are given the formula sheet I just need to understand what the formula is and when to use it correctly

@sadafzmusheer 2 жыл бұрын

I was afraid I would fail my exam, but I got 96%...all because of watching your videos. Thank you!!

@Edspira 2 жыл бұрын

Congratulations!

@muhammadshahteong7670 6 ай бұрын

Alhamdulillah...

@matthewhatcher110 9 жыл бұрын

Great explanation and example of WACC. Thank you

@TriNguyen-xi8ji 7 жыл бұрын

Thank you very much. Very concise and well explained.

@conniez3407 2 жыл бұрын

Whenever I have a question about managerial accounting study, I know I can find an answer here, thank you!

@lovinnaalasa3611 7 жыл бұрын

thanks a lot this explanation just made my evening... thanks a bunch

@lonlyheart11 7 жыл бұрын

you're a life saver , wonderful explanation

@hanzeltan5977 7 жыл бұрын

THIS REALLY HELPS. THANK YOU!!

@jonathanslayton9072 3 жыл бұрын

I do not know where I would be in my accounting journey if it was not for you. Thank you so much

@ignaciopazgarcia5370 2 жыл бұрын

This is not accounting, is Finance

@jonathanslayton9072 2 жыл бұрын

@@ignaciopazgarcia5370 I am getting an accounting degree which involved finance classes but thanks anyways

@othgyal12 9 жыл бұрын

Wow thank you so much for this!! Makes more sense to me now :)

@shivamasnavikhan4990 4 жыл бұрын

othgyal12 Minimun Acceptable Rate of Return & Weighted Average Cost of Capital Calculator: DiscountingRate.com

@SiriusSati 8 жыл бұрын

Thank you for this video!!! This really helps!!!

@Edspira 8 жыл бұрын

+SiriusSati Happy to help!

@laurencec09 5 жыл бұрын

Wow I wish I would be given all the numbers like this in an exam!

@AliA-oy8qq 5 жыл бұрын

Excellent video. Thank you!

@richardgordon 7 жыл бұрын

Really great explanation of WACC. Thanks a lot!

@shivamasnavikhan4990 4 жыл бұрын

Richard Gordon Minimun Acceptable Rate of Return & Weighted Average Cost of Capital Calculator: DiscountingRate.com

@anandroy1798 5 жыл бұрын

bro.... i legit love you

@healthycuriosity2998 2 жыл бұрын

Thanks :) You can also add an additional risk factor z to the formula if the degree of risk of the project is significantly fluctuating from the company's one, this could be because of entering a new unknown market or with a new activity....

@meryem768 2 жыл бұрын

The professor didn't explain it as clear as you did, you have the ability to clarify even the complicated concepts.. you absolutely saved my semester.. thanks a lot ! Greetings from Morocco 👋

@Edspira 2 жыл бұрын

Glad it helped!

@GlenWilliams-jf6lr 16 күн бұрын

Thanks a million, this was most beneficial.

@uniquelymewithsimonestewart 7 жыл бұрын

Hi I need some assistance. I have a paper due but I don't know where to start. Can I email the question to you and you provide me with some guidance?

@mayher559 2 жыл бұрын

I wish my teacher explains it like this.. thank you 🙏

@josephkinyua3557 6 жыл бұрын

Excellent! now i get the concept

@michaelcarthyn9286 3 жыл бұрын

Thank you so much! This is quite helpful

@mariamatrawally7377 8 ай бұрын

Such a helpful video, thanks 😊

@marksnyder4102 8 жыл бұрын

Excellent lecture

@zuko2000 10 ай бұрын

As a 5th year accountancy student, this channel helps me a lot in my accounting exams

@Edspira 10 ай бұрын

😀

@zuko2000 8 ай бұрын

@@EdspiraI just want to share to you that I passed the 5th year Integrated Classes in my university. I'll be graduating this coming May 2024. I'll be taking the CPA licensure exam here in Philippines on October 2024. Thank you so much for the knowledge imparted to us. It is truly amazing how much this channel helped me in my exams. Thank you. 😊

@vodkafishy 8 жыл бұрын

Very clear explanation! Thanks!

@Edspira 8 жыл бұрын

+Julien Campeau No problem. I hope you have a great winter break!

@BabyBluePrincezz 5 жыл бұрын

Thank you, this is really helpful for my exams :-)

@shivamasnavikhan4990 4 жыл бұрын

Jazel Minimun Acceptable Rate of Return & Weighted Average Cost of Capital Calculator: DiscountingRate.com

@rossstremme394 7 жыл бұрын

you make great videos and explain it to a t.

@lostmillenial2381 3 жыл бұрын

Thank you this helped so much!

@zishanali1204 7 жыл бұрын

Very helpful! Thanks

@yolimacoba 5 жыл бұрын

Thank you it was very easy to understand

@ZufashPlaytime 7 жыл бұрын

i just want to say Brilliant ,,, Well done Sir !!!!

@shivamasnavikhan4990 4 жыл бұрын

ASIF KHAN Minimun Acceptable Rate of Return & Weighted Average Cost of Capital Calculator: DiscountingRate.com

@vimolly 5 жыл бұрын

Excellent explanation

@maxrubin9540 2 жыл бұрын

what's the title of the video that talks about tax shields? I can't seem to find it, thanks!

@Somethingforgotten 8 жыл бұрын

Fantastic video! Learning so much, thank you. But where is your CAPM video?

@Edspira 8 жыл бұрын

+Somethingforgotten I'm not sure if I made one yet. If I didn't, I will make sure to post one this summer when I resume video production. Thanks for the request!

@lucasamorim5506 2 жыл бұрын

great video as always

@TheNgunju 7 жыл бұрын

greatly appreciated

@AN-xn1dc 7 жыл бұрын

this is a simple version, would you please do a longer version like if you have more then 2 types of finance and how would you calculate each type of finance I.e. how would you calculate cost of debt, ordinary share and preference shares THAT WOULD REALLY HELP!!!THANK YOU

@Edspira 7 жыл бұрын

Good suggestion. I will absolutely try to do that this summer!

@d_15745 2 жыл бұрын

Did he ever put a video explaining why we use after tax cost of debt? If yes, where can I find it? Thank you

@bhavikupadhyaya972 3 жыл бұрын

Thank you so much

@GCubed-bf3zt 8 жыл бұрын

Great video but can you explain how to arrive at the cost of debt and the cost of equity? I think you mentioned that there's another video on how to calculate the cost of equity but I wasn't able to find it. Can you post the links for those videos if they exist?

@du3lcitiz3n 5 жыл бұрын

What they said... my wife for her finance class needs to calculate the right side of the equation... when they give you the WACC already. Where is that video example?

@adrianm0466 8 жыл бұрын

where can i find the further explanation on tax shields? tq

@marissa03820 7 жыл бұрын

Why isn't preferred stock included in your calculation of WACC? Thanks for the videos!

@Vishal537 8 жыл бұрын

I don't get the tax shield, please help. Thanks!

@nathanberry7737 8 жыл бұрын

Excellenet video!

@HotdogFish1 3 жыл бұрын

Thanks~ for the video. Very much appreciated!

@Edspira 3 жыл бұрын

Glad it was helpful!

@jackthebeanstalkdelohio5146 2 жыл бұрын

To find the cost of debt through wacc, will I have to calculate corporate's tax?

@DiegoPreciado-xy5vb 3 ай бұрын

great video

@joegill03 Жыл бұрын

does anyone know what program the instructor is using to teach us this material? what's this called... this youtube projector thing? also, great video... helped me pass a professional certification

@notoriousxlv4796 Жыл бұрын

thanks a lot!

@kennethhill613 Жыл бұрын

You scared me with the .1 and .0072! haha but thank you sir that was a wonderful example!

@Clifffffffffford 6 жыл бұрын

Thanks !

@hiteshlalwani8868 3 жыл бұрын

🙌🙌 much helpful..thank you.

@yositasunintaboon4455 3 жыл бұрын

amazing

@nightthemare4742 2 жыл бұрын

You are amazing! Thanks man.

@Edspira 2 жыл бұрын

You're welcome!

@patricembaya8183 3 жыл бұрын

Beautifully explained

@Edspira 2 жыл бұрын

Thank you so much 🙂

@91Muzzle 8 жыл бұрын

You are amazing! Are you on Patreon or something like that?

@Edspira 8 жыл бұрын

+91Muzzle Thank you! I'm not on Patreon-- that is something I need to look into this upcoming year as I expand with more videos. Thanks for the heads-up!

@iannene750 4 жыл бұрын

Thanks 🙏🏾 🙏🏾🙏🏾

@adammcconville757 6 жыл бұрын

You should probably also mention that re= rf + beta (rm - rf) for when you're not given the cost of equity. How do you calculate the NPV of a possible investment project using WACC?

@bencekarsai6413 Жыл бұрын

No, actually you are wrong. rE is not equal to rA - which you are referring to. rE= (E+D)/E * rA - D/E * rD ! whereas rD is the capital cost of debt which is more or less rF (risk free) - depending on how someone interpret it (you can add country risk to rF)

@AishaLaDon 4 жыл бұрын

How does this relate to WACC = WCS × CCS + WPS × CPS + WD × CD? Im super confused. For my online class I am basically trying to teach my self. My professor does not give examples.

@Edspira 4 жыл бұрын

By "WD" I assume your prof is referring to the proportion of debt financing, while "CD" means the cost of debt. For example, if the company was financed 80% by common stock at a cost of 10% and 20% by debt a cost of 12% (assuming no preferred stock), the WACC would be (80%*10%) + (20%*12%).

@shubramsubramanyam542 4 жыл бұрын

Can I know what software is used to create this video?

@pamelamaemayo1714 8 жыл бұрын

How did you get the answer .0072? Because while I was conputing I can only get an answer of 0.072. And then when I add 0.072 to the first one which is 0.1 the result was 0.172. not 0.1072. Can you please do explain it further? I would really do appreciate it if you will. Thank you. :)

@cibo6187 Жыл бұрын

Me too..

@paula.fernandez7465 8 жыл бұрын

sounds good

@blindlinx_uk6724 Жыл бұрын

Why are youtube videos better at teaching me my course than my 9.5k lectures

@amogelangradebe6901 4 жыл бұрын

So this formula does not cater for preference shares ??

@rob8482 6 жыл бұрын

I will not stoop so low, as to call this video wack, I just wont do that! lol Hey in my last chapter of Intermediate II and Managerial II. I have to laugh, or I'm going to cry! lol Prepping for finals without these videos, would be awful. MUCH LOVE !!!

@ahabjordan 4 жыл бұрын

All this easy how to get numbers and plug into the formula like the cost of equity?

@yohantamang7955 7 жыл бұрын

whats the meaning of proportion of equity=50%?

@JagTheRipper 7 жыл бұрын

How do you find out the cost of debt and equity.

@woeiruty123 5 жыл бұрын

I know it has been 2 years, but it might help someone reading the comments later on like I did. The cost of debt is the interest rate that you have to pay for a loan. If you have multiple loans, you can calculate all of the seperate interest payments (per loan) -> Adding them all up and then divide them by the total debt. The cost of equity is the price that the shareholders expect to be paid. Sometimes it's given, but you can also calculate it with the Capital Asset Pricing Model. Edspira also made a video on that subject here: kzfaq.info/get/bejne/nKqqkqeYqbCoZZs.html