With no debt, the WACC is the cost of equity plus the required rate of return on the company's underlying assets.

Name: With no debt, the WACC is the cost of equity plus the required rate of return on the company's underlying assets.
Brand: Quizplus
Rating: 4.9 (43 reviews)

Question

Quizplus · Accepted Answer

The WACC (Weighted Average Cost of Capital) with no debt is equal to the cost of equity, as there is no debt to factor into the calculation. The required rate of return on the company's underlying assets is not added separately.

With No Debt, the WACC Is the Cost of Equity