YatırımMasasıYatırım Masası homeFundamental analysisTurkish: WACC (Ağırlıklı Ortalama Sermaye Maliyeti)
What is Weighted Average Cost of Capital?
The weighted average of a company's cost of equity and cost of debt; used as the discount rate in DCF.
ExampleIn a company with a WACC of 12%, an investment with an ROIC of 15% creates value.The figures in the example illustrate the concept; they are not current market data.
Related terms
Discounted Cash FlowA method that values a company by discounting its future cash flows to their present value.Return on Invested CapitalThe return a company earns on its total invested capital; a measure of capital allocation efficiency.Discount RateThe rate used to discount future cash flows to today; it reflects risk and the time value of money.VolatilityA statistical measure of how much price fluctuates over a period; used as a proxy for risk.
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Frequently asked questions
What is Weighted Average Cost of Capital?
The weighted average of a company's cost of equity and cost of debt; used as the discount rate in DCF.
What is Weighted Average Cost of Capital called in Turkish?
In Turkish financial reporting and news, Weighted Average Cost of Capital is called WACC (Ağırlıklı Ortalama Sermaye Maliyeti).
Which concepts are related to Weighted Average Cost of Capital?
The concepts most often mentioned together with Weighted Average Cost of Capital are Discounted Cash Flow, Return on Invested Capital and Discount Rate.
More terms in Fundamental analysis
Active ManagementAlpha (α)ArbitrageAsset AllocationBalance SheetBear MarketBeta (β)BondBull MarketCapital Expenditure (Capex)Cash FlowCorrelationDilutionDiversificationDividendDividend YieldEarnings Per ShareEarnings ReleaseEarnings SurpriseEnterprise Value (EV)EquityEV/EBITDAFair ValueGross Profit MarginGrowth StockHigh-Frequency Trading (HFT)Income StatementInsider TradingInternal Rate of ReturnInvestment InstrumentsLeverageLiquidityMargin CallMarket CapitalizationNet Profit MarginOpen PositionP/B Ratio (Price-to-Book)P/E Ratio (Price-to-Earnings)PortfolioReturn on AssetsReturn on EquitySharpe RatioShort PositionSpreadStop-LossStop-Loss OrderValue StockWeighted Average Cost