Understanding Cost of Debt and Calculating WACC with an example
Cost of Debt is important to understand the yield to maturity (interest rate) on the current debt that the company owes. Understand it as the interest rate on your debt is the Cost of Debt. This formula is part of WACC (weighted average cost of capital. At the end of the video, we showcase an example using Cost of Equity, Cost of Debt including the tax shield to calculate the WACC.
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This is the 9th of 11 videos that teach Business Finance in Section 6 and is a good starting point if you are new to Finance or need a refresher.
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#businesseducation #corporatefinance #wacc #costofdebt
Пікірлер: 10
Great explanation. I rarely feel this way, but wish your videos were a bit longer.
This is so simplified, thank you!! I'm sitting for my CPA BEC exam soon so this very helpful :')
Glad I just discovered this Channel.
Awesome !! Was very easy to understand
So clear, thank you
This is excellent. Thank you.
Thank you so well instructed
With which app did you make this video?
where did you find cost of equity i have no idea where you got it
@frederikplet1579
3 ай бұрын
Use need to use the CAPM formula, just search a stocks beta, and for risk free rate its usually US treasury bonds yeild, which currently is about 4%, and expected return of market is usually around 8% so plug the numbers in the formula and google the beta of a stock. Hope you understand