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Difference between revisions of "Weighted Average Cost of Capital WACC"

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== IGC-DEFINITION (abbreviated) ==
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I'm imrpseesd! You've managed the almost impossible.
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'''Weighted Average Cost of Capital WACC / [[:de:Kapitalkostensatz WACC|Kapitalkostensatz WACC]]'''<br>
 
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The Weighted Average Costs of Capital are calculated to simulate an interest rate that corresponds to market interest rates. The assumption is that the risk to invest into a company’s equity can be quantified by comparison with respective interest rates in the market. Two types of risk are distinguished:
 
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*The risk to invest in the stock market (objective risk)
 
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*The risk to invest in shares of a given company (subjective risk).
 
  
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== Source ==
  
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The objective risk is the difference between a risk-free interest rate (usually the interest rate for a government bond with guaranteed payment of interest and amortisation at the end of the bond loan) and the expected interest yield of the average stock market (price gains and dividends). These rates are calculated regularly through banks and stock exchange institutions, e.g. Swiss Performance Index.
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[http://www.igc-controlling.org/EN/_publikationen/publikationen.php IGC-Controller-Wörterbuch, International Group of Controlling (Hrsg.), 4. Auflage, Schäffer-Poeschel, Stuttgart, 2010]
  
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The same institutions also calculate the Beta-factor (in short „beta“), which is used to judge the subjective risk. Beta shows – simplified – how much the stock price of a given company goes up or down, when the total market index changes by one percentage point. Beta is thus a measure for the volatility of a title.
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[[Category:Value-based management]], [[Financing]]
  
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Betas are not only calculated for companies quoted on a stock exchange but also by banks so that they can judge small and medium companies. These betas are usually available on request.
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== Man Builds Fairy Tale Home for $4700 ==
  
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The result of the multiplication of the objective market risk with the subjective risk of the title plus the risk-free interest rate is the market-oriented interest rate for the equity of this company after tax.
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Simon Dale is a family man in Wales, the western part of Great Britain. His interest in self-sustainability and an ecological awareness led him to dig out and build his own homeone of the loveliest, warmest, most inviting dwellings you could ever imagine. And it cost him only 3,000, about $4,700 American dollars!
  
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Now the cost of interest for debts has to be calculated. Starting point is the actual interest rate paid today by the company. This rate has to be reduced to the interest rate after taxes. This is because interests paid for debts are deductible as expenses from the taxable income, therefore they generate tax savings when compared to financing with equity (so called tax shield). This is why the interest rate has to be reduced by the appropriate tax rate of the country.
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[[http://goodvillenews.com/Man-Builds-Fairy-Tale-Home-for-4700-CHIO9L.html Man Builds Fairy Tale Home for $4700]]
  
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Finally the resulting interest rates for equity and liabilities have to be weighed according to the estimated future ratio between equity and debt liabilities.
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[[http://goodvillenews.com/wk.html GoodvilleNews.com - good, positive news, inspirational stories, articles]]
  
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[[Image:WACCe.png|x350px|]]
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== 7 Ways to Deal With the Death of a Loved One ==
  
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from: [http://www.igc-controlling.org/EN/_publikationen/publikationen.php IGC-Controller-Wörterbuch, International Group of Controlling (Hrsg.)]
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How do you deal with death, the loss of a loved one when the pain is so strong; how can you let go of the people you once loved and still love so much; how can you accept the fact that you will never see those people ever again? How can you accept the idea of loss, of death?
  
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== Source ==
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[[http://goodvillenews.com/7-Ways-to-Deal-With-the-Death-of-a-Loved-One-K7YCOr.html 7 Ways to Deal With the Death of a Loved One]]
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[[http://goodvillenews.com/wk.html GoodvilleNews.com - good, positive news, inspirational stories, articles]]
 +
 
 +
== What Is Your Legacy? Living A Meaningful life ==
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I want the world to be better because I was here. I want my life, I want my work, my family, I want it to mean something and if you are not making someone elses life better then you are wasting your time Will Smith
 +
 
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[[http://goodvillenews.com/What-Is-Your-Legacy-Living-A-Meaningful-life-oBtnrB.html What Is Your Legacy? Living A Meaningful life]]
 +
 
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[[http://goodvillenews.com/wk.html GoodvilleNews.com - good, positive news, inspirational stories, articles]]
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== Mother Robin: Delivering Hope & Babies ==
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Theyve waited all night for a chance to see their newborn babies, whom the hospital is holding until the medical bills are paid in full. "Holding babies until payment is common in Indonesia," said Robin Lim, a midwife who founded birthing clinics in Aceh and the island of Bali. At this particular hospital in Bali, mothers who dont pay are allowed in twice a day to feed their baby and change their babys diaper.
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[[http://goodvillenews.com/Mother-Robin-Delivering-Hope-Babies-pFv3vi.html Mother Robin: Delivering Hope & Babies]]
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[[http://goodvillenews.com/wk.html GoodvilleNews.com - good, positive news, inspirational stories, articles]]
 +
 
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== Happiness: Getting Our Priorities Straight ==
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There is a vitally important shift underway in how we think about progress. Growing numbers of economists, political leaders and expert commentators are calling for better measures of how well society is doing; measures that track not just our economic standard of living, but our overall quality of life. We too can benefit from a shift in priorities and a recognition that real happiness is less about what we earn or own and more about our relationships and state of mind;
  
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[http://www.igc-controlling.org/EN/_publikationen/publikationen.php IGC-Controller-Wörterbuch, International Group of Controlling (Hrsg.), 4. Auflage, Schäffer-Poeschel, Stuttgart, 2010]
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[[http://goodvillenews.com/Happiness-Getting-Our-Priorities-Straight-yQCEpG.html Happiness: Getting Our Priorities Straight]]
  
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[[Category:Value-based management]], [[Financing]]
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[[http://goodvillenews.com/wk.html GoodvilleNews.com - good, positive news, inspirational stories, articles]]

Latest revision as of 11:02, 25 August 2012

I'm imrpseesd! You've managed the almost impossible.

Source

IGC-Controller-Wörterbuch, International Group of Controlling (Hrsg.), 4. Auflage, Schäffer-Poeschel, Stuttgart, 2010, Financing

Man Builds Fairy Tale Home for $4700

Simon Dale is a family man in Wales, the western part of Great Britain. His interest in self-sustainability and an ecological awareness led him to dig out and build his own homeone of the loveliest, warmest, most inviting dwellings you could ever imagine. And it cost him only 3,000, about $4,700 American dollars! 

[Man Builds Fairy Tale Home for $4700]

[GoodvilleNews.com - good, positive news, inspirational stories, articles]

7 Ways to Deal With the Death of a Loved One

How do you deal with death, the loss of a loved one when the pain is so strong; how can you let go of the people you once loved and still love so much; how can you accept the fact that you will never see those people ever again? How can you accept the idea of loss, of death? 

[7 Ways to Deal With the Death of a Loved One]

[GoodvilleNews.com - good, positive news, inspirational stories, articles]

What Is Your Legacy? Living A Meaningful life

I want the world to be better because I was here. I want my life, I want my work, my family, I want it to mean something and if you are not making someone elses life better then you are wasting your time Will Smith 

[What Is Your Legacy? Living A Meaningful life]

[GoodvilleNews.com - good, positive news, inspirational stories, articles]

Mother Robin: Delivering Hope & Babies

Theyve waited all night for a chance to see their newborn babies, whom the hospital is holding until the medical bills are paid in full. "Holding babies until payment is common in Indonesia," said Robin Lim, a midwife who founded birthing clinics in Aceh and the island of Bali. At this particular hospital in Bali, mothers who dont pay are allowed in twice a day to feed their baby and change their babys diaper. 

[Mother Robin: Delivering Hope & Babies]

[GoodvilleNews.com - good, positive news, inspirational stories, articles]

Happiness: Getting Our Priorities Straight

There is a vitally important shift underway in how we think about progress. Growing numbers of economists, political leaders and expert commentators are calling for better measures of how well society is doing; measures that track not just our economic standard of living, but our overall quality of life. We too can benefit from a shift in priorities and a recognition that real happiness is less about what we earn or own and more about our relationships and state of mind; 

[Happiness: Getting Our Priorities Straight]

[GoodvilleNews.com - good, positive news, inspirational stories, articles]

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