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WACC and capital allocation?
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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.
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.
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.
To reflect the changing requirements of our clients, we have redefined our debt advisory service offering and established a dedicated team of consultants to secure the benefits of the currently strong...
The WACC is a calculation of the ‘after-tax’ cost of capital where the tax treatment for each capital component is different. In most countries, the cost of debt is tax deductible whi...
The seventh article in this series on the WACC discusses how the company’s valuation gap might be used as a potential source of shareholder value creation. It explains why current market pric...
From the previous articles in this series, it can be concluded that estimating the WACC is already a diff icult exercise in a developed market. Doing the same exercise in an emerging market environ...
Part five of the WACC Guide examines the extent to which input, assumptions and models used for project app roval can create a biased opinion of the shareholder value.
Treasury, as the cu...
This part looks at how risk management is an instrument that can be used to lower the WACC and create shareholder value.
Hybrids are financial instruments that combine certain elements of debt and equity. Examples are preferred equity, convertible bonds, subordinated debt and index-linked bonds. For the issuers, hybr...
The second article in this series on WACC discusses why the credit rating should not be a goal in itself, but the result of the corporate objective to maximize value for shareholders and other stak...
This seven-part series, authored by Zanders consultants, provides CFOs and corporate treasurers with a better understanding of the weighted average cost of capital (WACC), which is recognized as on...
