Increasing Shareholder Value by Utilizing Tax Opportunities
The WACC is a calculation of the ‘after-tax’ cost of capital where the tax treatment for each capital component is different. In most countries, the cost of debt is tax deductible while the cost of equity isn’t, for hybrids this depends… read more
Keep Track of Your Company’s Valuation Gap!
The seventh article in this series on the WACC discusses how the company’s valuation gap might be used as a potential source of shareholder value creation. It explains why current market prices, as observed on stock markets, might temporarily deviate from… read more
Estimating the WACC in Emerging Markets - The Challenges
From the previous articles in this series, it can be concluded that estimating the WACC is already a diff icult exercise in a developed market. Doing the same exercise in an emerging market environment will be even more challenging. This article… read more
Project Selection - How to Choose the Right Project and Make Effective Comparisons
Part five of the WACC Guide examines the extent to which input, assumptions and models used for project app roval can create a biased opinion of the shareholder value.
Treasury, as the custodian of risk management, could reinforce its role… read more
The Impact of Corporate Risk Management on Shareholder Value
This part looks at how risk management is an instrument that can be used to lower the WACC and create shareholder value.
Hybrids, Expensive Debt or Cheap Equity?
Hybrids are financial instruments that combine certain elements of debt and equity. Examples are preferred equity, convertible bonds, subordinated debt and index-linked bonds. For the issuers, hybrid securities can combine the best features of both debt and equity: tax deductibility for… read more
Creating Shareholder Value - Towards an Optimal Credit Rating
The second article in this series on WACC discusses why the credit rating should not be a goal in itself, but the result of the corporate objective to maximize value for shareholders and other stakeholders. It elaborates on managing the WACC… read more
Is Estimating the WACC Like Interpreting a Piece of Art?
This seven-part series, authored by Zanders consultants, provides CFOs and corporate treasurers with a better understanding of the weighted average cost of capital (WACC), which is recognized as one of the most critical parameters in strategic decision-making. The series highlights strategies… read more
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