Post by florentia on Mar 10, 2021 18:14:50 GMT
Hey everyone, I need some F3 help!
So as I understand it there are two WACC formulas:
WACC =keg[ve/(ve+vd]+kd(1-t)[vd/ve+vd]
WACC=Keu[1-(vdt/ve+vd]
I'm not really sure when I should use each one. I had an aptitude one question referring to "long dated bonds with a coupon rate of 5%". I used 5% as Kd for the first formula, but it's wrong and I don't understand why.
Hoping someone can help?
So as I understand it there are two WACC formulas:
WACC =keg[ve/(ve+vd]+kd(1-t)[vd/ve+vd]
WACC=Keu[1-(vdt/ve+vd]
I'm not really sure when I should use each one. I had an aptitude one question referring to "long dated bonds with a coupon rate of 5%". I used 5% as Kd for the first formula, but it's wrong and I don't understand why.
Hoping someone can help?