The Weighted Average Cost of Capital (WACC) for firm valuation calculations: A reply
Llano-Ferro (2009) proposes a solution to avoid “significant errors” when the Weighted Average Cost of Capital (WACC) “obtained by the standard formula leads to significant errors in Net Present Value of the Firm calculations; particularly in those that apply to perpetual cash flow series. In this paper we show that there are not “significant errors” but a wrong use of the formula and improper calculations of values.
Year of publication: |
2009-07-05
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Authors: | Velez-Pareja, Ignacio |
Institutions: | UNIVERSIDAD TECNOLÓGICA DE BOLÍVAR |
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