Capital

Calculating WACC: Weighted Average Cost of Capital Formula

6 min read

The Weighted Average Cost of Capital (WACC) formula is a key tool used in Forex trading. It is a calculation that estimates a company’s cost of capital by weighting the cost of debt and cost of equity by their respective market values. WACC helps investors get a better understanding of the amount of returns they can expect to earn when investing in a company. This is an important formula for investors, as it allows them to evaluate how much risk is associated with the returns they can expect from a given investment. WACC can also be used to compare the cost of various sources of capital for a company, which can help traders make more informed decisions about their investments.