Behind Every Investment Decision Lies One Number: WACC

In today’s fast-changing world of rising interest rates, inflation, and global uncertainty, understanding the cost of money is crucial. WACC — the Weighted Average Cost of Capital — is the number that quietly guides business decisions, valuations, and investm

WACC Explained Simply : WACC combines two key costs:

• Cost of equity — what investors expect as a return for taking risk
• Cost of debt — the interest companies pay on loans
  Together, they form the average cost of every dollar a business uses.

How WACC Guides Decisions

• Companies use WACC to judge whether a project or investment will add value. If expected returns exceed WACC, it’s worth pursuing; if not, it may destroy value. This metric also influences company valuations and stock prices.

High vs. Low WACC: What It Means

• High WACC: Borrowing becomes expensive, fewer projects make sense, and growth slows.
• Low WACC: Financing becomes cheaper, more investments are viable, and valuations rise.
  Even a small change in WACC can shift decisions like opening a new facility or expanding operations.

Agenda of webinar:

• 3:00-3:10 –   Introduction: Why Cost of Money Matters Today
• 3:10-3:20 –   Breaking Down WACC in Simple Language
• 3:20-3: 30–   How WACC Influences Business Decisions
• 3:30-3:40 –   Volatile World: What Has Changed?
• 3:40-3:55 –   How Companies Manage WACC in Uncertain Times
• 3:55-4:00 –   Key Takeaways

Why this webinar is important:

Rising interest rates, inflation, and market volatility have made the cost of money unpredictable. WACC helps companies understand how expensive it is to raise funds and how risk in the economy affects business decisions. Companies use WACC to judge whether a project or investment will add value. If expected returns exceed WACC, it’s worth pursuing; if not, it may destroy value. This metric also influences company valuations and stock prices.