Chapter 6 - Calculating Weighted Average Cost of Capital (WACC)

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  • Опубликовано: 15 сен 2024
  • Calculating Weighted Average Cost of Capital for a publicly traded firm using information found on Yahoo Finance.

Комментарии • 43

  • @JD0509
    @JD0509 4 года назад +2

    Jamie, I find your video is the best of all. Simple, easy and well explained I was wondering how to correlate WACC calculation with Financial statement. Only you did this best job. Thanks so much

  • @arthurpreuss3338
    @arthurpreuss3338 4 года назад

    It was very hard to find something useful like this. Very good, Thank you very much!!

  • @RD-ed5zj
    @RD-ed5zj 4 года назад

    Super useful & highly appreciated!! Thank You Jaime

  • @jeremychong810
    @jeremychong810 5 лет назад +1

    Hi, another way of calculating cost of debt is using YTM of the most recently issued bond or weighted YTM of outstanding bonds. How does this method compare to the one you have just showed? Great video! Very clear instructions. Thank you!

  • @gabrielcoja4015
    @gabrielcoja4015 4 года назад +1

    Great video! Thank you!
    I have a question, please. Do we need only the outstanding number of shares when calculating WACC, or all issued ones? Something like treasury stocks for instance, which are not included in the number of outstanding shares.
    Thanks again for the posted videos! Very helpful!

  • @elifbeyzapandr5131
    @elifbeyzapandr5131 4 года назад +1

    the company that i am doing calculation has a negativ income tax expense. Does it change something?

  • @yuruofeng8361
    @yuruofeng8361 4 года назад

    It is very helpful for my stock report, thanks a lot!!!

  • @62anweshroy
    @62anweshroy 4 года назад

    Why are operating leases not included in the cost of debt calculation?

  • @nerd1900
    @nerd1900 4 года назад

    thank you. very practical!!! LOVE the video

  • @peterheine6240
    @peterheine6240 4 года назад

    Hello
    I have a question. Why is the income tax rate taken into account when calculating the WACC?

  • @1VBURSEY
    @1VBURSEY 5 лет назад

    I enjoy your analyses and your pedagogical-approach in a majority of your models. In the case where dividends are not paid on common equity, and where preferred stock is carried on the balance sheet, is there a model available in your portfolio of work?

  • @Agha-Talib
    @Agha-Talib 5 лет назад

    How do i calculate the wacc for a company if i dont have the numbers. Here is the question :
    (a) “Compute the Weighted Average Cost of Capital (WACC) for Norwegian as of August 30, 2018. Assume that the risk-premium is 5%. Make other assumptions as you see fit.”
    Please help me.

  • @shawnfrank5303
    @shawnfrank5303 4 года назад

    Hi Jamie, thanks for a great video .. not sure if you still visit these videos to answer questions .. I was doing an evaluation of Intel. The Interest on the income statement was not listed as an expense but it is noted as Net interest and this turned out to be positive so I am assuming it is a gain as prior years it was in the negative. So how do I use this formula with an interest gain rather than an expense, does anything change ? Thank you !

  • @muhammadrizwan7718
    @muhammadrizwan7718 4 года назад

    thanks . how to analyze the implied cost of equity in stata kindly help me
    make a video on following models Gebhardt et al. (2001),
    Claus and Thomas (2001),
    Ohlson and Juettner-Nauroth (2005),
    Easton (2004), and
    Gordon and Gordon (1997)

  • @samitesfay2312
    @samitesfay2312 6 лет назад

    if the company didnt pay any tax that quarter, net tax is positive instead of negative , how do I calculate NOPAT

  • @ahabjordan
    @ahabjordan 4 года назад

    how did you calculate the cost of equity I got lost there?

  • @itzelmelgoza
    @itzelmelgoza 4 года назад

    Thanks, now all that make sense to me!!!

  • @VARKEYMAN
    @VARKEYMAN 6 лет назад

    why is market value of equity used? isnt it suppose to be face value?

  • @denyssemiller9606
    @denyssemiller9606 6 лет назад

    Would this be considered market value and not book value WACC?

  • @Junior-bc5vw
    @Junior-bc5vw 7 лет назад +1

    Thanks for this wideo.
    I have few questions
    1- why did you used two financial statement instead of one?
    2- Why did you ignore account payables and other liabilities for your total debt?
    3- How can I workout the tax only with EBIT?

    • @JaimeLancasterHumboldt
      @JaimeLancasterHumboldt  7 лет назад +1

      Two financial statements? The income statement gives me expenses such as interest paid and the balance sheet gives me the debt.
      Ignore account payable and other liabilities? That's because firms don't typically pay interest on those. We're just concerned with debt that has an interest rate.
      Ebit only? I need more information. Do you just have the $ amount of EBIT or are you given other variables as well?

    • @Junior-bc5vw
      @Junior-bc5vw 7 лет назад

      In your video, you used current liabilities for 2011 and 2012, and I believe that you will condidere long term libilities for 2011 if it would have been stated. that what I meant by " two financial statements instead of one" why you did not focus on current liabilities. If I am asking this question is because in another video, a someone used only information coming from financial data for only one year.
      I went on yahoo finance, but unlike you, income before tax was not given for my company " SSE PLC". then I was wondering how I will find the tax rate.
      I am doing a coursework but for a real company SSE where I am a supposed to find the WACC then I found your wonderful videos, but I don't understand why you used data from financial statement of two different years (2011-20012)
      I apologize for any mistakes, english is not my first language.

    • @Junior-bc5vw
      @Junior-bc5vw 7 лет назад

      In your video, you used current liabilities for 2011 and 2012, and I believe that you will condidere long term libilities for 2011 if it would have been stated. that what I meant by " two financial statements instead of one" why you did not focus on current liabilities. If I am asking this question is because in another video, a someone used only information coming from financial data for only one year.
      I went on yahoo finance, but unlike you, income before tax was not given for my company " SSE PLC". then I was wondering how I will find the tax rate.
      I am doing a coursework but for a real company SSE where I am a supposed to find the WACC then I found your wonderful videos, but I don't understand why you used data from financial statement of two different years (2011-20012)
      I apologize for any mistakes, english is not my first language.

    • @Junior-bc5vw
      @Junior-bc5vw 7 лет назад

      I am trying to finish this course work while I am only at the first question and time is not on my side
      1. why total debt in 2012 includes short term debt in 2011.
      a. if GAP had long term debt value in 2011, would you still include it in your total debt in 2012?
      for my course work this is what I have for instance
      2012 2011 2010 .
      current liabilities. 22.000 23000 19000
      long term liabilities. 125,000 124,000 130,000
      Why can't I considere only data for 2012 when calculating WACC?
      Thanks

  • @a2bt456
    @a2bt456 4 года назад

    i am unable to get debt from balamce sheet
    will you please help me how to find out total debt?

  • @axelmontero500
    @axelmontero500 6 лет назад

    What should I do if the Interest expense of the company I seleceted is a Negative Number ?

    • @JaimeLancasterHumboldt
      @JaimeLancasterHumboldt  6 лет назад

      That can mean that the company earned interest. You'll need to look at their debt and cash balances to see if that makes sense.

  • @ainmustafa9940
    @ainmustafa9940 6 лет назад +1

    thank you and its really helpful!!

  • @adnanzia4534
    @adnanzia4534 6 лет назад

    the pakistani companies are not available in yahoo finance so what i do ???? plzz help

  • @reezalzainudin8097
    @reezalzainudin8097 4 года назад

    Thank you, you’re amazing!

  • @jac6003
    @jac6003 4 года назад

    Awesome! Thank you very much! :)

  • @stanko4333
    @stanko4333 3 года назад

    what about preffered stock

  • @adamsd6638
    @adamsd6638 4 года назад

    Thank you!

  • @achillespetant
    @achillespetant 8 лет назад

    Hi I am doing this for an assignment for school and some of my income statements don't have income before taxes what should I do?

    • @June-us4mi
      @June-us4mi 8 лет назад

      You probably need to calculate it using other information given to you in the problem .

    • @achillespetant
      @achillespetant 8 лет назад

      +Princess Pearl and how would I adjust units for billions like my outstanding shares say 18.38b when the statements are in thousands?

    • @jaimelancaster810
      @jaimelancaster810 8 лет назад

      +achillespetant 18.38 billion is 18,380,000,000. So, you knock off the last three zeros and you're good to go: 18,380,000 thousand.

    • @jaimelancaster810
      @jaimelancaster810 8 лет назад

      +achillespetant 18.38 billion is 18,380,000,000. So, you knock off the last three zeros and you're good to go: 18,380,000 thousand.

  • @jakemoen1177
    @jakemoen1177 4 года назад

    Life saver

  • @dipanjandash4485
    @dipanjandash4485 5 лет назад

    thanks a lot

  • @abbasfaizy4769
    @abbasfaizy4769 6 лет назад

    What to do if there no shares outstanding? plz reply asap

    • @JaimeLancasterHumboldt
      @JaimeLancasterHumboldt  6 лет назад +1

      If it's a publicly traded company, there will be shares outstanding. Is it saying 0 in Yahoo?

  • @charlesallen1484
    @charlesallen1484 4 года назад

    Kevin gates