Glossary · Finance

What is Weighted average cost of capital?

Also known as: WACC

A rate showing how much, on average, a company "pays" for its equity and borrowed funds: the cost of each source is weighted by its share in the financing. If the return on an investment project is below this rate, the project does not increase the value of the company.

Source: BMT ESCWA lug'ati: Weighted average cost of capital; IRMI: Weighted Average Cost of Capital

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