Hi Friends,
Good Afternoon...
Today's Word:
Delegate(v):
Syn:
1: to entrust to another
2: to appoint as one's representative
3: to assign responsibility or authority
E.g: In order to get everything done on time, the committee leader chose to delegate some of the minor tasks to junior members.
Term of the Day - Weighted Average Cost Of Capital (WACC) :
Broadly speaking, a company’s assets are financed by either debt or equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
A firm's WACC is the overall required return on the firm as a whole and, as such, it is often used internally by company directors to determine the economic feasibility of expansionary opportunities and mergers. It is the appropriate discount rate to use for cash flows with risk that is similar to that of the overall firm.
The WACC equation is the cost of each capital component multiplied by its proportional weight and then summing:
WACC = (E/V) * Re + (D/V) * Rd * (1-Tc)
Where:
Re = cost of equity
Rd = cost of debt
E = market value of the firm's equity
D = market value of the firm's debt
V = E + D
E/V = percentage of financing that is equity
D/V = percentage of financing that is debt
Tc = corporate tax rate
Joke:
Boss(After a long and boring speech): Sorry, I left my watch at home.
Someone from back: But you had a Calendar behind you !!!
Today's investing mantra
"To expect a lot is irrational. You're likely to be happier and gain felicity by aiming low." - Charlie Munger, on what to expect from the stock market.
Today's Quote:
"Most people are as happy as they make up their minds to be." - Abraham Lincoln
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Thanks & Regards,
Murali Sankar S
"A Good Plan of Today is better than Great Plan of tomorrow's."
you can See my daily GM in http://muralisankars.blogspot.com/
