How WACC should be computed to begin a valuation
I cannot seem to begin a valuation. In order to compute E + D = VA (FCF; WACC) I require the WACC and to compute the WACC I need D and E. Where must I start?
Expert
The method of valuation that uses the WACC is an iterative process. This can be started by seeming a certain debt and WACC. After we acquire the value, we can check whether this coincides with the initially predicted debt. If this does not, we change this and so on. If the process is completed with an electronic spreadsheet, the spreadsheet understands the iterations until acquiring consistent values for the WACC and for the shares and debt.
Regarding the WACC which has to be applied to a project, must it be an expected return, the average historical return or an opportunity cost on similar projects?
Stock variable: It is a variable whose value is measured or evaluated at a point of time.
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