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?
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I created my investment banking blog in 2012 as soon as I resigned from i-banking & published my book, To Become An Investment Banker.
Initially published at girlbanker.com, all posts were later subsumed into my personal website under katsonga.com/GirlBanker.
With 7 years of front office i-banking experience from Goldman Sachs and HSBC, in both classic IBD (corporate finance) and Derivatives (DCM / FICC), the aim of GirlBanker.com was to make it as straight-forward as possible to get into a top tier investment bank.
I'm also a CFA survivor having passed all three levels on the first attempt within 18 months - the shortest time possible.