WACC and Capital Allocation

WACC and Capital Allocation

In any company, the weighted average cost of capital (WACC) is one of the critical parameters in strategic decision-making. We offer extensive knowledge in the setting up of a WACC framework for international use.

The WACC is used as:

  • a discount rate in valuations,
  • a hurdle rate for capital allocation, and
  • a discount rate for impairments.

Despite the fact that a simple WACC calculation is seen as text book material, the determination and application of a fair and usable WACC is far from standard. In our opinion, determining the WACC involves both art and science.

We can assist in:

  • defining the group-wide WACC,
  • specific division or country WACC, and
  • setting up capital allocation strategy and policy from a corporate finance point of view.

Our added value is our specialized expertise in determining the WACC. The WACC calculations are supported by extensive documentation, describing all assumptions and inherent choices.


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WACC and capital allocation?

Sander van Tol
Get in touch with Sander van Tol or for more information about WACC and capital allocation.