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WACC Calculations in Practice : Incorrect Results due to Inconsistent Assumptions - Status Quo and Improvements

WACC Calculations in Practice : Incorrect Results due to Inconsistent Assumptions - Status Quo and Improvements

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GRÜNINGER, Matthias C., Axel H. KIND, 2013. WACC Calculations in Practice : Incorrect Results due to Inconsistent Assumptions - Status Quo and Improvements. In: Accounting and Finance Research. 2(2). ISSN 1927-5994. eISSN 1927-5994

@article{Gruninger2013Calcu-28620, title={WACC Calculations in Practice : Incorrect Results due to Inconsistent Assumptions - Status Quo and Improvements}, year={2013}, doi={10.5430/afr.v2n2p36}, number={2}, volume={2}, issn={1927-5994}, journal={Accounting and Finance Research}, author={Grüninger, Matthias C. and Kind, Axel H.} }

<rdf:RDF xmlns:rdf="http://www.w3.org/1999/02/22-rdf-syntax-ns#" xmlns:bibo="http://purl.org/ontology/bibo/" xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:dcterms="http://purl.org/dc/terms/" xmlns:xsd="http://www.w3.org/2001/XMLSchema#" > <rdf:Description rdf:about="https://kops.uni-konstanz.de/rdf/resource/123456789/28620"> <dcterms:rights rdf:resource="http://nbn-resolving.org/urn:nbn:de:bsz:352-20140905103605204-4002607-1"/> <dc:creator>Kind, Axel H.</dc:creator> <dc:contributor>Kind, Axel H.</dc:contributor> <dcterms:title>WACC Calculations in Practice : Incorrect Results due to Inconsistent Assumptions - Status Quo and Improvements</dcterms:title> <dcterms:available rdf:datatype="http://www.w3.org/2001/XMLSchema#dateTime">2014-08-01T13:24:30Z</dcterms:available> <dc:date rdf:datatype="http://www.w3.org/2001/XMLSchema#dateTime">2014-08-01T13:24:30Z</dc:date> <dcterms:bibliographicCitation>Accounting and Finance Research ; 2 (2013), 2. - S. 36-44</dcterms:bibliographicCitation> <dc:creator>Grüninger, Matthias C.</dc:creator> <bibo:uri rdf:resource="http://kops.uni-konstanz.de/handle/123456789/28620"/> <dc:rights>deposit-license</dc:rights> <dc:language>eng</dc:language> <dcterms:issued>2013</dcterms:issued> <dcterms:abstract xml:lang="eng">This paper argues that in practical applications the weighted average cost of capital (WACC) is often incorrectly estimated due to the simultaneous use of two inconsistent input parameters: (i) a beta of debt equal to zero when transforming asset betas into equity betas (beta levering) and (ii) a cost of debt above the risk-free interest rate when calculating the WACC. The paper discusses and quantifies the consequences of this inconsistency and offers viable solutions. By replacing the cost of debt with the risk-free rate, a more accurate WACC is calculated and the estimation of the cost of debt becomes obsolete. Furthermore, the paper presents a solution to obtain the correct WACC without increasing the calculation’s complexity.</dcterms:abstract> <dc:contributor>Grüninger, Matthias C.</dc:contributor> </rdf:Description> </rdf:RDF>

Dateiabrufe seit 01.10.2014 (Informationen über die Zugriffsstatistik)

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