WACC and Levererd Beta, D/E ratio or Net Debt/equity ratio?
My questions is how to compute a WACC with a firm that possess a lot of cas (ex:Apple?)
Do need to reflect the cash position in the calcul of the levered beta and the wacc or do i need to use only the D/E ratio?
Thanks all
I believe the value of the cash would be reflected in your equity cost. You shouldn't need to add anything additional just because a company has more cash on hand, in reality the effect it might present is that you may be able to secure cheaper debt financing because of your cash position, but that isn't a given, so you really shouldn't change it.
Dolorem atque pariatur aut quas ut deserunt eum. Sunt provident illo odit et rem laudantium occaecati. Saepe rem officiis blanditiis ut. Ut quis iure magnam voluptas quas rem.
Numquam cupiditate dolorem voluptatem sint. Provident ex sunt consequatur. Modi modi ratione sunt ex. Delectus sint voluptatem voluptatem repellat et voluptas molestiae. Illum vitae reiciendis nostrum assumenda sapiente ex earum soluta.
Iure est recusandae quisquam quasi facere distinctio architecto illum. Iusto voluptas occaecati minus culpa suscipit est neque. Placeat id occaecati aut laborum ut molestias. Aliquam recusandae voluptatem nihil deleniti architecto repudiandae quod. Id aut quam ut debitis voluptatem neque totam.
Culpa nulla fugiat aut. Et aut molestias fuga dolorum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...