wacc breakdown (net debt usage/ average debt)
Dear users, Please help me to understand wacc calculation. I do my master programme and teacher of Corporate Finance course requires us to calculate wacc using average net debt. Could you help me understand the logic? I have checked: -berk, demarzo -damodaran -brealey myers And i haven't manage to find an answer there. They just mention we could use net debt if a firm has lots of cash, but that's all. In cases when net debt is negative we have to consider it as a zero. However, a firm uses debt and gets tax shield advantage, so logic in unclear for me. And what about using average? As far as i know, past data are irrelevant for valuation purposes. What's the logic of using average? At the moment of valuation we have concrete amount of debt, why do we should* pay attention to the past then? Thanks in advance! * from our teacher perspective ps: it's top business-school in my country so i guess there should be logic somewhere pss: next session in 2 weeks, i will definitely ask him, but it interests me right now :)
Et provident non et. Quasi sapiente sit quae quas nemo. Aut minus nam ab earum voluptatem facere. Mollitia distinctio cum ut dolores tempore.
Aut veritatis et est commodi aut. Cupiditate voluptas ea assumenda harum rerum quam.
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...