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afg

  • 3 years ago

Hello, I need some help in estimating WACC of a firm which has its manufacturing base in India but has say all its sales to the US. In such a case, should one take a US WACC for the firm or India WACC. If I take the US WACC, should I need to adjust for country risk (currency risk etc). Appreciate your help on this. Many many thanks.

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  1. BruLee
    • 3 years ago
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    I'd say calculate the cost of equity using US values and adjust it for country risk in India.

  2. afg
    • 3 years ago
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    Thanks BruLee

  3. abhisheksinha4111978
    • 3 years ago
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    We always would look at the country where it is being manufactured. In today's time where the US govt. is more likely to default compared to indian goverment I would prefer to take Indian 10 year bond rates as risk free return.

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