Using Market Cap in D/E weights for WACC and Beta Calculations
Why does the Street use E = market value of the firm's equity (Market Cap) for the D/E weights in the calculation of WACC and beta (unlevering and relevering), not book value of equity? I understand that for debt, we simply use what's recorded in book since we assume market value and book value of debt are similar. Please correct me if I am wrong.
Cum tempore quidem consequatur inventore. Est blanditiis temporibus officiis. Rerum maxime odio reiciendis est dolores qui et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...