** Please see the attached file for the complete solution response **
I've attached a detailed explanation of WACC and its formula.
A calculating example is provided for your reference.
Broadly, the assets of a company are financed by either debt or equity. WACC is the average of the cost of each of these sources of financing weighted by their respective usage in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it borrows.
A firm's WACC is the overall required return on the firm as a whole. It is the appropriate discount rate to use for cash flows similar in risk to the overall firm. A calculation of a firm's cost of capital ...
In this solution, Weighted Average Cost of Capital (WACC) is explained in detail. A calculation example is included for better understanding of the concept.