In the formula for the [[WACC]]:

$\Large \text{WACC} = W_D*C_{debt} + W_E*C_{equity}$

With:
$W_D$ = [[Weight for debt]]
$C_{debt}$ = [[Cost of Debt]]
$W_E$ = [[Weigth for Equity]]
$C_{equity}$ = [[Cost of Equity]]

There are for ways to determine weight for capital:

# Book value
## $\Large \text{Market Value(Equity)} = \text{Common Shares Outstanding} * {P_0}$
# Market value:
## $\Large \text{Market Value(Debt)}$
# Marginal weights
## 
# Target weights
## Based on ideal capital structure
## Single [[WACC]] based on that so called optimal structure
bag
finance_public
created
Sat, 05 Feb 2011 08:49:14 GMT
creator
dirkjan
modified
Sat, 05 Feb 2011 08:49:14 GMT
modifier
dirkjan
tags
M12
Term
creator
dirkjan