Is it possible to use a constant WACC in valuation
Is this possible to use a constant WACC in the valuation of a company along with a changing debt?
Expert
The WACC can only be constant theoretically; if a constant debt is expected. If the debt changes from one year to the subsequent, the WACC changes too. In turn to value companies wherein debt changes dramatically, the Adjusted Present Value (AVP) is easier and more intuitive.
This is possible to use a constant WACC that is the weighted average of the WACC of the different years while debt changes, but this is a number that does not contain anything to do with the WACC in an exact year.
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Our purpose this week: learning how to understand and interpret financial statements. Assignment: The class should discuss all of the questions listed below as they rel
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