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  • Financial Management - Part Two

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    David Luko Chifwalo
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    The WACC is a crucial metric that serves as the minimum hurdle rate or lowest bar for a company's profitability. A company needs to achieve profits exceeding its WACC in order to stay in operation. While it is preferable for businesses to achieve higher returns than the WACC on projects and investments, the WACC requires cautious application as a threshold.

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    Financial Management

    Original Title

    Financial Management- Part Two

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    The WACC is a crucial metric that serves as the minimum hurdle rate or lowest bar for a company's profitability. A company needs to achieve profits exceeding its WACC in order to stay in operation. While it is preferable for businesses to achieve higher returns than the WACC on projects and investments, the WACC requires cautious application as a threshold.

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    © All Rights Reserved
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    37 views3 pages

    Financial Management - Part Two

    Uploaded by

    David Luko Chifwalo
    The WACC is a crucial metric that serves as the minimum hurdle rate or lowest bar for a company's profitability. A company needs to achieve profits exceeding its WACC in order to stay in operation. While it is preferable for businesses to achieve higher returns than the WACC on projects and investments, the WACC requires cautious application as a threshold.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 3

    The

    WACC
    is 13%

    WACC is a crucial metric that serves many functions. If we use the wrong
    WACC it will fail to sets the tone clearly wherein it is the minimum hurdle rate or
    the lowest bar. And to stay in operation, a company needs to achieve profits in
    excess of this rate or this threshold. It is always preferable if the business can
    achieve or launch a project with a rate greater than this. However, it requires
    cautious application. (Borad, 2022)

    Reference
    Borad, S. B. (2022, June 2). Importance and Use of Weighted Average Cost of Capital (WACC). eFinanceManagement
    WACC). eFinanceManagement. Retrieved September 13, 2022, from https://efinancemanagement.com/investment-decisions/i
    t.com/investment-decisions/importance-and-use-of-weighted-average-cost-of-capital-wacc

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