The Weighted Average Cost of Capital (WACC) has significant implications for a company's financial strategy. It represents the average rate a company should pay to finance its assets. Therefore, it can influence decisions about capital structure, investment, and risk management. A higher WACC indicates that a company is more volatile and riskier than the market average, which may require a more conservative financial strategy. Conversely, a lower WACC suggests that a company is less risky, potentially allowing for more aggressive investment strategies.
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