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.

Capital

Weighted Average Cost of Capital: What Forex Traders Should Know

4 min read

Weighted Average Cost of Capital (WACC) is a measurement of a company’s cost of capital and a primary determinant of its capital structure. It is an important indicator in financial markets, as it is used to measure a company’s ability to access additional sources of financing and allocate its own resources in a more efficient manner. In the case of Forex, WACC is the average yield required by a company to raise funds from all sources, including equity, debt, and foreign exchange. It is calculated by taking the cost of each source of capital and then adjusting it to their total weighted capital structure.