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toffer
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Hi, I'm a bit confused about Apple's wacc (doing a school valuation). How does the 66b$ in cash come into play when estimating their wacc?
 3 years ago
 3 years ago
toffer Group Title
Hi, I'm a bit confused about Apple's wacc (doing a school valuation). How does the 66b$ in cash come into play when estimating their wacc?
 3 years ago
 3 years ago

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gloomberg Group TitleBest ResponseYou've already chosen the best response.1
doesn't play any role... WACC involves only debt and equity... or perhaps! how much debt more you could leverage on to seek for more debt, socalled optimal capital structure... but i doubt it.
 3 years ago

toffer Group TitleBest ResponseYou've already chosen the best response.0
Ok, I can't see any reason for them to lever up anytime soon, and there will be no optimal capital structure analysis. So you're saying that since they have no debt I can simply use the cost of equity to discount future cash flows to firm and add the financial assets to arrive at the quity value?
 3 years ago

Vinicius_Caldas Group TitleBest ResponseYou've already chosen the best response.0
If a firm doesn´t have debt, its WACC is equal to cost of equity. Your problem will be choose the best method to find the Ke. Among all methods are CAPM, APM, 3factor model and others.
 3 years ago
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