Business, Management and Accounting
4 years ago

Unveiling the Truth: WACC is Not a Cost of Capital

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RePEc: Research Papers in Economics
WACC: Definition, misconceptions and errors
Pablo Fernández

Paper Summary

The WACC is a way to figure out how much a company's future cash flows are worth. It's not a cost, but a mix of different rates. The paper points out 7 common mistakes about WACC and shows how it relates to tax shields.

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