This is WACC

0
(0)
Back

Here is the downloadable PDF of the INSANE wacc problem, but it might be easier to see the work here as blown-up images. Turns out, this problem is a nightmare and we had to create some very clever formulas to get to the bottom of it and solve it completely 100% A-Z. The part that said: “Find the cost of debt consistent with the debt ratio of 20%” wasn’t straightforward, and after reviewing our file, it WASN’T a given, but was part of the puzzle!

How insane! However, kudos to the professor for creating the hardest problem we’ve ever seen… at least you know how to alter the capital structure of a firm now and figure out the optimal WACC…

I shortened the interest coverage table a bit because the busy work doesn’t add any value: the process is the same regardless of how long the interest coverage table is. Look VERY carefully at how we solved the problem!

An-WACC-Problem-InsanityDownload

Solution:

Here comes the secret sauce, that we didn’t quite understand at the review! Carefully look at this!

  • Search Terms: is thisiswacc this wacc an wacc this
  • The use of this software is to provide check figures to compare against your own individual work. Accuracy of the check figures is not guaranteed. By purchasing credits and using our software/services, you assume all liability for the use of the software and affirm that you are abiding by your university’s academic policies. Please report any errors above.