Recent economic anomalies, including the unprecedented lockdown generated by the COVID-19 crisis, have demonstrated that the weighted average cost of capital (WACC) remains an actual topic in the financial literature and in practice. Companies operate in
Zbysław Dobrowolski +3 more
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Analyze Return on Equity and Weighted Average Cost of Capital Linkages to Firm Value
The company's stock price which always experiences a decline is the background of this research. This study aims to determine the effect of return on equity (ROE) and Weighted Average Cost of Capital (WACC) on firm value in the textile and garment ...
Deuis kartinah +2 more
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Market value calculation and the solution of circularity between value and the weighted average cost of capital WACC [PDF]
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.
Vélez-Pareja, Ignacio, Tham, Joseph
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Optimal seismic upgrade timing in seaports with increasing throughput demand via real options [PDF]
A real options (RO) formulation is proposed for decision-making on the timing to upgrade the seismic performance of existing seaports with increasing throughput demand in earthquake prone areas.
Bradley B. A. +11 more
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The goal of this study is to optimize a company’s capital structure by modelling and programming the required equations in the components of weighted average cost of capital.
Andrey Kulikov +4 more
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The weighted average cost of capital over the lifecycle of the firm: Is the overinvestment problem of mature firms intensified by a higher WACC? [PDF]
Firm lifecycle theory predicts that the Weighted Average Cost of Capital (WACC) will tend to fall over the lifecycle of the firm (Mueller, 2003, p. 80-81). However, given that previous research finds that corporate governance deteriorates as firms get older (Mueller and Yun, 1998; Saravia, 2014) there is good reason to suspect that the opposite could ...
Carlos S. Garcia +2 more
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Generalization of the Brusov–Filatova–Orekhova Theory for the Case of Variable Income
To expand the applicability in practice of the modern theory of cost and capital structure, the theory of Brusov–Filatova–Orekhova (BFO), which is valid for companies of arbitrary age, is generalized for the case of variable income.
Peter Brusov, Tatiana Filatova
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Cost of capital, returns and leverage: empirical evidence from the S&P 500 [PDF]
Expected Returns, Actual Returns, and Leverage: Empirical Analysis of the S&P 500, 2006-2015 ABSTRACT Purpose The theoretical construct of the weighted average cost of capital (WACC), which uses an expected equity return, suggests that lower WACC,
Bace, Edward
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Constant Leverage And Constant Cost Of Capital: A Common Knowledge Half-Truth
A typical approach for valuing finite cash flows is to assume that leverage is constant (usually as target leverage) and the cost of equity, Ke and the Weighted Average Cost of Capital, WACC are also assumed to be constant.
Ignacio Vélez–Pareja
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The Impact of Intellectual Capital on The Cost of Capital (Case: Firms Listed in Tehran Stock Exchange) [PDF]
In this study, the relationship between weighted average cost of capital (as one of the economic approach to assess the performance) with intellectual capital was studied.
Saeed Safari Bideskan
doaj

