hard20 pts · first answer countsvaluationwacc

Weights that depend on the answer

An analyst uses the DCF's own equity value to set the WACC weights, which changes the WACC, which changes the equity value. How is this usually handled?

A.Use book values for the weights to avoid the loopB.Set the WACC equal to the pre-tax cost of debtC.Ignore it, since the effect is always exactly zeroD.Use target weights, or iterate until weights and value agree

Discussion 0

Join free to post in the discussion.

Weights that depend on the answer

Discussion 0

Related questions