When calculating the WACC, it is standard practice to subtract ________ to compute the net debt outstanding.

Question

Quizplus · Accepted Answer

When calculating the WACC, the net debt outstanding should include only debt and exclude any cash or risk-free securities held by the company. Therefore, it is standard practice to subtract the amount of cash and risk-free securities from the total debt outstanding to arrive at the net debt outstanding figure.

When Calculating the WACC, It Is Standard Practice to Subtract