Weighted average cost of capital of a credit institution: Assessment and optimization methods

2017 ◽  
Vol 23 (14) ◽  
pp. 792-803
Author(s):  
S.S. Evdokimova ◽  
◽  
S.A. Bondarenko ◽  
Keyword(s):  
Average Cost ◽  
Cost Of Capital ◽  
Weighted Average ◽  
Optimization Methods ◽  
Credit Institution

LA FUSIÓN CARULLA-VIVERO, ¿CREÓ VALOR?

2014 ◽  
Vol 5 (10) ◽  
pp. 93
Author(s):  
Andrés Villegas Cortés ◽  
Luz Ángela Rojas La Rota
Keyword(s):  
Average Cost ◽  
Cost Of Capital ◽  
Economic Value ◽  
Weighted Average ◽  
Value Added ◽  
Economic Value Added ◽  
Estudio De Caso

El presente trabajo busca determinar si la fusión de las empresas Carulla-Vivero ocurrida en el año 2000 generó valor. Para esto, se estudia el conceptode valor, posteriormente se explica el estudio de caso como metodología deinvestigación para concluir con la exposición del caso mismo de la fusión, ysu resultado. Una vez realizado el análisis de las dos empresas, se hace unacomparación y una valoración por dos metodologías ampliamente aceptadas:los métodos Economic Value Added (EVA) - Weighted Average Cost of Capital(WACC) y Flujo de Caja Histórico, con lo cual se explora en su interior la fusióny se explican los resultados obtenidos en ella. Finalmente, se hace una seriede observaciones, conclusiones y recomendaciones sobre la fusión, asícomo de la metodología del estudio de caso, para el abordaje de temas de laadministración.

More on the Weighted Average Cost of Capital: A Comment and Analysis

1974 ◽  
Vol 9 (6) ◽  
pp. 1069 ◽  
Author(s):  
Charles M. Linke ◽  
Moon K. Kim
Keyword(s):  
Average Cost ◽  
Cost Of Capital ◽  
Weighted Average

The Weighted Average Cost of Capital for the Analysis of Innovative Projects Integrated into the Company

2021 ◽  
pp. 103-111
Author(s):  
Sergey N. Yashin ◽  
Egor V. Koshelev ◽  
Natalya A. Yagunova ◽  
Victor P. Kuznetsov ◽  
Elena V. Romanovskaya
Keyword(s):  
Average Cost ◽  
Cost Of Capital ◽  
Weighted Average

scholarly journals Market value calculation and the solution of circularity between value and the weighted average cost of capital WACC

2009 ◽  
Vol 10 (6) ◽  
pp. 101-131 ◽  
Author(s):  
Ignacio Vélez-Pareja ◽  
Joseph Tham
Keyword(s):  
Average Cost ◽  
Cost Of Capital ◽  
Weighted Average ◽  
Cost Of Debt ◽  
Cost Of Equity ◽  
Tax Rate ◽  
Market Values ◽  
Equity Cost ◽  
Tax Payments ◽  
The Cost

Most finance textbooks present the Weighted Average Cost of Capital (WACC) calculation as: WACC = Kd×(1-T)×D% + Ke×E%, where Kd is the cost of debt before taxes, T is the tax rate, D% is the percentage of debt on total value, Ke is the cost of equity and E% is the percentage of equity on total value. All of them precise (but not with enough emphasis) that the values to calculate D% y E% are market values. Although they devote special space and thought to calculate Kd and Ke, little effort is made to the correct calculation of market values. This means that there are several points that are not sufficiently dealt with: Market values, location in time, occurrence of tax payments, WACC changes in time and the circularity in calculating WACC. The purpose of this note is to clear up these ideas, solve the circularity problem and emphasize in some ideas that usually are looked over. Also, some suggestions are presented on how to calculate, or estimate, the equity cost of capital.

ITC Limited: Decoding Business Segment Betas

2019 ◽  
Vol 23 (02) ◽  
pp. 203-235
Author(s):  
Shalini Talwar ◽  
Anmol Garg
Keyword(s):  
Average Cost ◽  
Cost Of Capital ◽  
Investment Decisions ◽  
Weighted Average ◽  
Extensive Discussion ◽  
Entire Process ◽  
The Third ◽  
The Future

OCV was seeking to improve its processes and enhance the skills of its analysts so as to provide valuable solutions for their clients in terms of the issues related to the profitability and risk of their existing business portfolios as well as the proposed new projects. A team was formed to evaluate if breaking down the weighted average cost of capital (WACC) to the divisional level could improve the quality of investment decisions by multi-division firms. ITC was chosen to analyse the entire process of breaking down WACC to the divisional level. The team had three distinct tasks to undertake. The first was the calculation of the divisional WACC for different business segments of ITC, the second was an extensive discussion on the issues that could arise in the complex computations, and the third was to take a final call on whether the breaking down of WACC to the divisional level would really add value to the future investment decisions.

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