Scribd
Upload
43 views1 page

Cost of Capital Calculation: Parameters Source

This document outlines the parameters and formulas needed to calculate the cost of capital for a company. It lists sources for debt, equity, tax rates, and other financial data, as well as formulas for the cost of debt, cost of equity, and weighted average cost of capital (WACC) using both nominal post-tax and pre-tax approaches. The WACC calculation balances the costs of a company's debt and equity sources of capital according to their weighted proportion of the firm's total value.

Uploaded by

arunsjain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
43 views1 page

Cost of Capital Calculation: Parameters Source

This document outlines the parameters and formulas needed to calculate the cost of capital for a company. It lists sources for debt, equity, tax rates, and other financial data, as well as formulas for the cost of debt, cost of equity, and weighted average cost of capital (WACC) using both nominal post-tax and pre-tax approaches. The WACC calculation balances the costs of a company's debt and equity sources of capital according to their weighted proportion of the firm's total value.

Uploaded by

arunsjain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 1

COST OF CAPITAL CALCULATION

Parameters Source

Debt (D)

Equity (E)

Government Guarantee Fee

Debt Equity (D/E)

Capital (V)

Debt Gearing (D/V)

Risk Free Rate (Rf)

Market Risk Premium (Rmp)

Tax Rate (t)

Debt Margin

Gamma (y)

Asset Beta (Ba)

Equity Beta (Be) Ba * (1 + (1 - t+ yt)D/E)

Inflation Rate (i)

Cost of Debt (Rd) Rf + Debt Margin

Cost of Equity (Re) Rf + (Be * Rmp)

'Vanilla' WACC (nominal post tax) Re*E / V + Rd*D / V

'Classical' WACC (nominal post tax) Re*E / V*(1-t)/(1-t(1-y)) + Rd*(1-t)*D / V

'Classical' WACC (nominal pre tax) Rd*(D/V) + Re/(1-T(1-y)) * E / V

WACC (real pre tax) (((1+WACCnom,post-tax)/(1+i))-1)/(1-t))

Information Input

Assumption: Information remain same


through out the year

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy