Determining the cost of debt and equity
Hello,
I am fairly new to ER and to fundamental analysis in general. From what I've gathered when you assign the Discount Rate to the NPV you include the WACC.
Which if I've understood right is the interest rate the company will have to pay on its debt etc.
The question I have is how do you find out what that number is? is it just a general macro analysis of the countries interest rates or is there a fancy math trick to finding it out?
Any help with this would be greatly appreciated
You can look at the YTM of their bonds. Alternatively you can divide their interest costs by total debt.
Thank-you for responding and for the help I'll employ those techniques going forward :)
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