by Girl Banker
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WACC represents the combined cost of debt and equity
The free cash flows in Discounted Cash Flow (DCF) Analysis are normally discounted using the weighted average cost of capital, WACC.
r(d)(1 - company's tax rate) is the post tax cost of debt.
You simply can't go to a corporate finance or asset management interview without knowing this formula. It is basic and fundamental.
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Where can you get the cost debt used to calculate WACC?
What is the Capital Asset Pricing Model, CAPM?
I created my investment banking blog in 2012 as soon as I resigned from i-banking & published my book, To Become An Investment Banker.
Heather Katsonga-Woodward: On Business, Life & Everything In-Between