View stunning SlideShares in full-screen with the new iOS app!Introducing SlideShare for AndroidExplore all your favorite topics in the SlideShare appGet the SlideShare app to Save for Later — even offline
View stunning SlideShares in full-screen with the new Android app!View stunning SlideShares in full-screen with the new iOS app!
The current weighted average cost a company faces for new or marginal dollar of capital.
It is not the average cost of dollars raised in the past.
Percentages of each capital component should be based on management's target capital structure.
Weights used in estimating the WACC should be based on market values, not book values.
Weights used in calculating WACC should also be based on expected future weights, which are the firm's target weights.
Net Operating Profit after Taxes (NOPAT) $4,797 $4,470 $3,956 Total (2,131) (1,957) (1,738) Cash Taxes 295 295 295 Goodwill Amortization $6,633 $6,132 $5,399 Operating Income 2003 2002 2001
Invested Capital Loans and notes payable Current portion of long-term debt Long-term debt Deferred taxes Total equity line Accumulated losses Accumulated goodwill amortization (Marketable securities) Total Invested Capital