This Is So WACC!

Thus far, we have done a great deal of preparatory work. In the remaining two chapters, we will finally get to reap the rewards of all this hard work. The efforts that have gone into calculating the various pieces of the puzzle are now going to pay off as those pieces begin to come together. There are two topics covered in this chapter. The first is the weighted average cost of capital, or WACC for short. Once we learn about the WACC, the second objective is to use this knowledge to examine capital structure theories. Upon accomplishing this, we will be ready to finally answer the question posed way back in ► Chap. 1 of how to maximize shareholder wealth.