Weighted average cost of capital (WACC) - a deeper look...
3 part lecture giving detailed insights into one of Finance's most vital concepts.
What you will learn
Deep dive into the Weighted Average Cost of Capital (WACC) along with its individual components.
High level understanding of Cost of Equity along with its calculations via the Capital Asset Pricing Model (CAPM) and Dividend Discount Model (DDM)
High level understanding of Cost of Debt along with its calculations, tax implications, cost of redeemable as well as irredeemable debt
Concept of IRR and its calculation based on interpolation
WACC Part 1 - Overview of WACC + Focus on Cost of Equity (Ke) This is the first part of a three part lecture relating to the Weighted Average Cost of Capital (WACC). In this lecture we will discuss WACC briefly and focus more on revising one of its components, the Cost of Equity (Ke). After this lecture, candidates should be able to: 1) Get a basic understanding of WACC. 2) Get an understanding of Ke, along with the underlying calculations. 3) Learn how to calculate growth rates based on past trends as well as growth rates based on the Gordon Growth Model. 4) Learn how to use the Compounded Annual Growth Rate (CAGR) formula, which is useful in practical life as well. Subscribe to my YouTube channel for further updates. Let's spread the knowledge and grow together.
WACC Part 2 - Cost of Debt (Kd). This is the second part of a three part lecture relating to the Weighted Average Cost of Capital (WACC). In this lecture we will mostly be revising how to tackle calculations relating to cost of debt and we will also revise areas of the previous lecture (WACC part 1). At the end of this lecture, you should be able to: 1) Get an understanding of the second component of WACC i.e Kd(1-t). 2) Get an understanding of how to calculate Kd(1-t) for: -Irredeemable Debt. -Redeemable Debt. 3) Calculate and get an understanding / revision of calculating IRR. Subscribe to my YouTube channel for subsequent lectures. Let's spread the knowledge and grow together.