What is Fenerbahce SK Company's Weighted Average Cost of Capital (WACC)?
What are the components of Fenerbahce SK Company's target capital structure and their respective costs?
Understanding Fenerbahce SK Company's WACC Calculation
Calculating Fenerbahce SK Company's WACC
To calculate the Weighted Average Cost of Capital (WACC) for Fenerbahce SK Company, we need to consider the weighted costs of each component in the capital structure.
WACC = (Weight of Debt * Cost of Debt) + (Weight of Preferred Stock * Cost of Preferred Stock) + (Weight of Common Equity * Cost of Common Equity)
Plugging in the values:
WACC = (0.35 * 3.90%) + (0.10 * 6.00%) + (0.55 * 14.75%)
WACC = 1.365% + 0.600% + 8.1125%
WACC = 10.0775%
Rounding to two decimal places, the WACC for Fenerbahce SK Company is 10.08%.
This calculation ensures that the company's overall cost of capital is accurately reflected in its funding structure.