Wacc 8621

The relationship between the unlevered cost of equity and WACC can be derived as follows:

Going through the same process assuming that the tax shield from debt is discounted at the unlevered cost of equity, gives us a present value of the tax shield from debt of $112, an enterprise value of $1,112, and an equity value of $712. The WACC in this case would be 8.993 percent. The relationship between the unlevered cost of equity and WACC would be:

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