Weighted Average Cost of Capital (WACC) Explained

[@RyanOConnellCFA]

💾 Download Free Excel File: ► Grab the file from this video here: ryanoconnellfinance.com/product/weighted-average-cost-of-capital-wacc-excel-template/ 🎓 Tutor With Me: 1-On-1 Video Call Sessions Available ► Join me for personalized finance tutoring tailored to your goals: ryanoconnellfinance.com/finance-tutoring/

[@bobagorof]

Thanks for this. This explanation has helped me to understand not only what WACC is but also what it might be used for. I've seen the formula before and without an explanation of where it comes from, but it makes sense now.

[@RyanOConnellCFA]

I'm really glad you got so much value out of this video! It is my pleasure

[@JamesManicom]

Fantastic video Ryan. Very easy to follow and understand.

[@RyanOConnellCFA]

Thank you for the feedback James!

[@ivan_leung_aus]

Thank you! You've done it again!!!!

[@RyanOConnellCFA]

Much appreciated Ivan!

[@chdanish6568]

Appreciate the tutorial Ryan. What about the cost of preferred stock? I just did a project on calculating the WACC of two companies and had to gather all the data from Yahoo Finance, Market Watch etc.

[@RyanOConnellCFA]

You're welcome! Intuitively, I think you'd include the percentage of funding that comes from preferred equity and the cost of preferred equity. Essentially, the WACC formula would change from a two component formula to a three component formula

[@abuhsaintishnchuo]

Thank you for this, how do we handle a question with retakned earnings?

[@FaithOlasehinde]

add the retained earnings to the equity.. it should be part of the equity of the company.

[@AZ-vw8gn]

Thank you

[@RyanOConnellCFA]

You're welcome!

[@manuellugo7484]

Awesome❤