kokonaispääomakustannus

Kokonaispääomakustannus, often abbreviated as WACC (Weighted Average Cost of Capital), is a financial metric used to estimate the average cost of all capital sources a company uses, including debt and equity. It represents the minimum rate of return a company must earn on its existing asset base to satisfy its creditors, owners, and other providers of capital.

The calculation of WACC involves weighting the cost of each capital component by its proportion in the company's capital structure. The primary components are the cost of debt and the cost of equity. The cost of debt is typically the interest rate the company pays on its borrowings, adjusted for the tax deductibility of interest payments. The cost of equity is the return required by equity investors, often estimated using models like the Capital Asset Pricing Model (CAPM).

WACC is a crucial concept in corporate finance for several reasons. It is widely used as a discount rate in capital budgeting decisions, such as evaluating investment projects or mergers and acquisitions. A project's expected return is compared to the WACC; if the return exceeds the WACC, the project is generally considered financially viable. It also serves as a benchmark for assessing a company's overall performance and its ability to generate value for its shareholders. A higher WACC indicates a higher risk associated with the company's cash flows, while a lower WACC suggests lower risk.