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Circular Flow Model
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Circular Flow Model
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Circular Flow
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Circular Flow
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Grade 12
Economics Circular Flow Model
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Circular Flow
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National Income
Economics Grade 12
Circular Flow Notes
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Grade 12
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WACC (weighted average cost of capital) is the average rate a firm pays for its financing from equity and debt and it is central in investment banking for valuation and discounting cash flows. Mathematically it combines equity costs, debt costs and the tax effect of debt as shown in the video. It reflects the required return investors expect given the capital structure and risk profile. In practice it is used as the discount rate in discounted cash flow models to determine enterprise value. WACC
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