Question:

Would you expect the WACC to be higher for a $1 billion or $100 million market cap company?

Answer hidden.

Answer:

It depends.

WACC is extremely dependent on the capital structure of the companies, so it's impossible to know without knowing that detail.

If you assume that the capital structure for the two companies are the same, then you would expect WACC to be higher for the $100 million market cap company because smaller companies are considered "riskier" than larger companies.

Other

DCF

How do you calculate WACC?

DCF

Why do you usually project out 5-10 years in a DCF?

DCF

How do you select the appropriate exit multiple when calculating terminal value?

DCF

What are the formulas for un-levering and levering Beta?

DCF

Which company would we expect to have a higher beta, an industrials company or an internet company?

DCF

What is a potential issue with basing terminal multiples on current public company multiples?

DCF

Walk me through how to get from Revenue to Unlevered Free Cash Flow in your DCF projections

DCF

How do you calculate cost of equity?

DCF

What is beta?

DCF

What happens if you use Levered Free Cash Flow instead of Unlevered Free Cash Flow in your DCF?

DCF

How do you calculate WACC for a private company?

DCF

Would you expect the cost of equity to be higher for a $1 billion or $100 million market cap company?

DCF

Question:

Would you expect the WACC to be higher for a $1 billion or $100 million market cap company?

Answer:

Other

DCF

How do you calculate WACC?

Why do you usually project out 5-10 years in a DCF?

How do you select the appropriate exit multiple when calculating terminal value?

What are the formulas for un-levering and levering Beta?

Which company would we expect to have a higher beta, an industrials company or an internet company?

Walk me through a DCF

How do you calculate terminal value?

What is the mid-year convention and why would you use it in a DCF?

How do you determine the discount rate in a DCF?

How do you calculate beta?