What is WACC - Weighted Average Cost of Capital

Weighted average cost of capital (WACC) is a way to measure the required rate of return of a company. Companies can use it to measure the profitability of a project. Investors can use it in something like discounted cash flow.

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DISCLAIMER: I am not a financial advisor. These videos are for educational purposes only. Investing of any kind involves risk. Your investments are solely your responsibility. It is crucial that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments. Please consult your financial or tax professional prior to making an investment.

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[ScoutyBoyO]

in the formula, the equity portion (at 3.25 min), do you mean R instead of D? You have r being the required rate of return. Great video.

[oliviat]

My corporate finance lecturer for my master's didn't explain this even half as good as you did! thank you so much!

[Thomas-owbm]

how is that you can explain these things better than my old MBA profs? how is this possible? I mean seriously, a person drops a 100k on an mba and then finds better sources on youtube. wtf. edit: well done, keep it up, thank you

[cafiveohsrockbandremix]

I love that you're able to explain WACC better in a 6:30 video than my Intermediate Finance textbook can in 40+ pages. Thank you!

[jacintafeng]

Perfectly explained, probably the best WACC explanation u can find on YouTube

[giantsquidy]

Thank you so much. I am in an MBA program and came from a very non-math undergraduate field. This video made everything clear. Profs and finance textbooks can be obscure and cryptic to those not of the math persuasion.

[mahmuttumenbatur]

ı have been watching so many videos since yesterday to prepare myself for the exam, yours is the best one. simple, clear and to the point. well done and thank you

[delickkanyesigye]

Finally I've found someone who has made more sense of this especially on the Real application of WACC. Wow

[mmiller]

I have read three sources on this subject when I should have just come watch your you!

[panagiotisanastasopoulos]

Half a semester of finance course in ~7 minutes!! Great work!

[olivercooper]

It’s incredible how such a complex perceived formula (or at least for me) can be explained so elegantly, what an incredible video!

[sweettwiss]

My CFA length lecture is embarrassing compare to the info you give in one short video. Thank you so much!

[nicoleluo]

This is the best best WACC explanation i have never seen! 👍

[printstudio]

woow..!!!...excellent piece of work bro...well done!!!

[lukebarmakian]

I've been trying to learn DCF forever and this helped so much I know it's not actually about dcf but still thanks!

[ibrahimmosavi]

You explained way better than my finance professor. Thank you!

[TA-wczz]

Way better than my professor. These professors complicate everything and spin it into some crazy concept.

[levibowles]

You already got a sub from me. I can't tell you how long I was looking for someone to break this down exactly like you did. Thank you!

[glee]

THANK YOU for this! I understand WACC in general and how to compute, but I was missing a clear reasoning of how it was applied back to whether a company should pursue a project of an expected return rate of x%. 🙏!

[marceljoshuakannampuzha]

I have my finance exam in week and this video was absolutely perfect for my learning, thank you very much. Very helpful and broke down a complex topic into its simplest form.