What is WACC?

Weighted Average Cost of Capital ("WACC") is used to discount 'risky' future investment cash flows.

People prefer certain investments over uncertain investments.

The risk premium is the amount of higher return investors demand to accept uncertainty.

Who Is WACCFINDER™ Built For?

WACCFINDER™ was born out of almost two decades helping frustrated investors get auditor approval in fair value reporting.

Is My Data Safe With WACCFINDER™?

WACCFINDER™ is [pending] certification by the Singapore government .

WACCFINDER™ carries the Cyber Essentials mark issued by Cyber Security Agency of Singapore.

The Cyber Essentials mark is published as Singapore Standardisation Programme, Technical Reference 106 (TR 106).

You can get a copy of TR 106:2022 “Tiered cybersecurity standards for enterprises” here: TR 106:2022 "Tiered cybersecurity standards for enterprises"

Customer Identify and Access Management (CIAM)

• All accounts are secured with two-factor authentication (2FA).
• Email and mobile phone logins are authenticated.

Data Protection Obligations

• User data including consents, preferences, and user data is stored in an auditable fashion.
• All user data is encrypted in motion and at rest.
• Access logs provide transparency and accountability for user actions.
  
  Read More

Is WACCFINDER™ International Valuation Standards (IVS) Compliant?

WACCFINDER™ Online is an automated valuation model (AVM).

It provides investors and auditors instant answers for financial reporting conversations.

Once parties are on the same page, they can order a WACCFINDER™ Report.

WACCFINDER™ Report is an IVS-compliant valuation.

When you order a signed WACCFINDER™ Report, you and you auditor get professional judgement.

This means a VALLARIS™ valuer provides you an opinion on the scepticism in the selection, use of valuation models and the application of inputs used in the valuation model as required for financial reporting.

For further details in respect of what makes a valuation report IVS compliant, please visit https://ivsc.org/standards/.

Classic vs Extended WACC: Why The Difference?

Our Classic WACC formula is based on the famed Modigliani–Miller theorem by of Franco Modigliani and Merton Miller. It forms the basis for modern thinking on capital structure. Our Extended WACC formula adds country risk premium and a small capitalization premium to Classic WACC. Valuation practitioners have found over time that Classic WACC under-estimates cost of capital in the real world.

What is an affiliate code?

An affiliate code is a unique identifier assigned to an affiliate partner. It is typically used to track the performance of an affiliate partner, and to ensure that the affiliate partner receives the correct commission for their referrals.

How is small capitalization premium calculated?

Small capitalization premium is typically calculated by subtracting the expected return of large-cap stocks from the expected return of small-cap stocks. The expected return of large-cap stocks is typically calculated by taking the average return of large-cap stocks over a period of time, and adjusting it for inflation. The expected return of small-cap stocks is typically calculated by taking the average return of small-cap stocks over a period of time, and adjusting it for inflation. The resulting number is typically expressed as percentage.

What is small capitalization premium?

Small capitalization premium is the additional return that investors require for investing in small-cap stocks instead of large-cap stocks. It is typically calculated by subtracting the expected return of large-cap stocks from the expected return of small-cap stocks, and is typically expressed as a percentage.

What is blended country risk premium?

Blended country risk premium is used to assess the risk of investing in more than country and to determine the appropriate rate of return for investments across those countries of operation. It is calculated by taking the weighted average of the countries risk premiums.

How is country risk premium calculated?

Country risk premium is typically calculated by subtracting the risk-free rate from the expected return of the country's stock market. The expected return of the country's stock market is typically calculated by taking the average return of the stock market over a period of time, and adjusting it for inflation. The resulting number is typically expressed as a percentage.

What is country risk premium?

Country risk premium is the additional return that investors require for investing in a particular country instead of a risk-free investment. It is typically calculated by subtracting the risk-free rate from the expected return of the country's stock market, and is typically expressed as a percentage.

How is equity risk premium calculated?

Equity risk premium is typically calculated by subtracting the risk-free rate from the expected return of the stock market. The expected return of the stock market is typically calculated by taking the average return of the stock market over a period of time, and adjusting it for inflation. The resulting number is typically expressed as a percentage.

What is equity risk premium?

Equity risk premium is the additional return that investors require for investing in stocks instead of risk-free investments. It is typically calculated by subtracting the risk-free rate from the expected return of the stock market, and is typically expressed as a percentage.

What is the difference between raw beta and adjusted beta?

The difference between raw beta and adjusted beta is that raw beta is the measure of a security's volatility relative to the market as a whole, before any adjustments are made for risk, while adjusted beta is the measure of a security's volatility relative to the market as a whole, after adjustments are made for risk. Raw beta is typically used to measure the risk associated with a particular investment, and is calculated by comparing the security's returns to the returns of the overall market. Adjusted beta takes into account the

How is adjusted beta calculated?

Adjusted beta is typically calculated by taking the raw beta of a security and adjusting it for the risk-free rate, the market risk premium, and the company's specific risk. This calculation is then adjusted for the risk-free rate, and is typically expressed as a number between 0 and 1.

What is adjusted beta?

Adjusted beta is the measure of a security's volatility relative to the market as a whole, after adjustments are made for risk. It is typically used to measure the risk associated with a particular investment, and is calculated by comparing the security's returns to the returns of the overall market.

How is raw beta calculated?

Raw beta is typically calculated by taking the covariance of the security's returns and the returns of the overall market, and dividing it by the variance of the returns of the overall market. This calculation is then adjusted for the risk-free rate, and is typically expressed as a number between 0 and 1.

What is raw beta?

Raw beta is the measure of a security's volatility relative to the market as a whole, before any adjustments are made for risk. It is typically used to measure the risk associated with a particular investment, and is calculated by comparing the security's returns to the returns of the overall market.

What is beta?

Beta in finance is a measure of a security's volatility relative to the market as a whole. It is typically used to measure the risk associated with a particular investment, and is calculated by comparing the security's returns to the returns of the overall market.

Why does the weighted average cost of capital insist on using a risk-free rate compared to a non-risk free rate?

The weighted average cost of capital (WACC) uses a risk-free rate instead of a non-risk free rate because it is a measure of the cost of capital for a company, and the risk-free rate is used as a benchmark for other investments. By using the risk-free rate, the WACC can be used to compare the cost of capital of different companies, and to assess the risk associated with a particular investment.

What is blended risk-free rate?

Blended risk-free rate is a rate of return that is calculated by combining the risk-free rate of return from different sources. This rate is used to measure the performance of investments and to compare different investments. It is also used to calculate the cost of capital for a company.

How is risk free-rate calculated?

Risk-free rate is typically calculated by taking the interest rate of government bonds with the longest maturity. This rate is then adjusted for inflation, and is typically expressed as a percentage.

What is risk-free rate?

Risk-free rate is the rate of return that an investor can expect to receive on an investment with no risk of loss. It is typically used as a benchmark for other investments, and is typically based on the interest rate of government bonds.

How to calculate cost of equity?

Use the capital asset pricing model (CAPM) to determine its cost of equity financing. Cost of Equity = Risk-Free Rate of Return + Beta × (Market Rate of Return – Risk-Free Rate of Return) to reach 1 + 1.1 × (10-1) = 10.9%.

What is cost of equity?

Cost of equity is the return that a company requires for an investment or project, or the return that an individual requires for an equity investment. The formula used to calculate the cost of equity is either the dividend capitalization model or the capital asset pricing model (“CAPM”).

How can I calculate a company's debt to capital ratio from the financial statements?

To calculate a company's debt to capital ratio from the financial statements, you need to divide the company's total debt by its total capital. Total debt is typically found on the balance sheet under liability, and total capital is typically found on the statement of shareholders' equity. The resulting ratio is typically expressed as a percentage.

What is the debt to capital ratio?

The debt to capital ratio is a measure of a company's financial leverage, calculated by dividing its total debt by its total capital. It is used to assess the risk associated with a company's capital structure, and is typically expressed as a percentage.

How does marginal tax rate differ from effective tax rate?

Marginal tax rate is the rate of tax that a person or company must pay on their next dollar of income. It is typically set by the government of the country in which the person or company is located, and can vary depending on the type of income and the amount of income earned. Effective tax rate is the rate of tax that a person or company actually pays on their income. It is typically lower than the marginal tax rate, as it takes into account deductions and other tax credits that may be

What is effective tax rate?

Effective tax rate is the rate of tax that a person or company actually pays on their income. It is typically lower than the marginal tax rate, as it takes into account deductions and other tax credits that may be available.

What is marginal tax rate?

Marginal tax rate is the rate of tax that a person or company must pay on their next dollar of income. It is typically set by the government of the country in which the person or company is located, and can vary depending on the type of income and the amount of income earned.

What is corporate tax rate?

Corporate tax rate is the rate of tax that a company must pay on its profits. It is typically set by the government of the country in which the company is incorporated, and can vary depending on the type of business and the size of the company.

Which can I find long term cost of debt on a company's financial statements?

Long term cost of debt can be found on a company's balance sheet. It is typically listed as the interest rate on long term debt, and can also be found in the notes to the financial statements.

What is pre-tax cost of debt?

Pre-tax cost of debt is the rate of return that a company must pay to its creditors for the use of borrowed funds, before taxes are taken into account. It is typically expressed as a percentage of the amount borrowed, and is calculated by taking into account the interest rate, fees, and other costs associated with the loan.

What is cost of debt?

Cost of debt is the rate of return that a company must pay to its creditors for the use of borrowed funds. It is typically expressed as a percentage of the amount borrowed, and is calculated by taking into account the interest rate, fees, and other costs associated with the loan.

What is weighted average cost of capital used for?

Weighted average cost of capital (WACC) is used to evaluate the cost of capital for a company, and is used to make decisions about investments and financing. It is also used to compare the cost of capital of different companies, and to assess the risk associated with a particular investment.

What is weighted average cost of capital?

Weighted average cost of capital (WACC) is the average cost of capital for a company, which is the cost of capital that a company must pay to finance its operations. It is calculated by taking into account the cost of debt and equity, and weighting them according to their respective proportions in the company's capital structure.

Who developed the average cost of capital formula?

The average cost of capital formula was developed by Nobel Prize-winning economist Franco Modigliani and his colleague Merton Miller in 1958. The formula is used to calculate the weighted average cost of capital for a company, which is the cost of capital that a company must pay to finance its operations.

Why do we look at a business' geography of operations instead of country of incorporation to identify which country risk premium to select?

We look at a business' geography of operations instead of country of incorporation to identify which country risk premium to select because the risk associated with a business can vary depending on the countries in which it operates. For example, a business operating in a country with a higher risk of political instability or economic volatility may be subject to a higher country risk premium than a business operating in a country with a lower risk of these factors.

What is a business' geography of operations? How is this different from country of incorporation?

A business' geography of operations is the geographic area in which the business operates. This can include the country of incorporation, as well as other countries in which the business has a presence. Country of incorporation is the country in which the business is legally incorporated. This is typically the country in which the business is headquartered and where it is registered with the relevant government authorities.

What is transactional currency?

Transactional currency is the currency used to conduct a financial transaction. It is typically the currency of the country in which the transaction is taking place, but can also be a foreign currency. Transactions involving foreign currencies are subject to exchange rate fluctuations, which can affect the value of the transaction.

What is an industry?

An industry is a sector of the economy that produces goods or services. Industries are typically divided into primary, secondary, and tertiary sectors, with each sector having its own unique characteristics and economic activities. Examples of industries include manufacturing, retail, finance, and healthcare.

What is duration of cash flow?

Duration of cash flow is the length of time it takes for a cash flow to be received or paid out. It is typically used to measure the risk associated with a particular investment, as longer duration cash flows are generally more risky than shorter duration cash flows.

What is valuation date?

Valuation date is the date on which the value of an asset or liability is determined. It is used to calculate the present value of an asset or liability, and is typically used in financial transactions such as mergers and acquisitions, stock options, and other investments.