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Weighted Average Cost of Capital

Weighted Average Cost of Capital or WACC is a measure of the company’s cost of capital across all sources like equity, debt and preference shares. It’s the number which is used as the discount rate in a dcf model. It represents the minimum return that a company must earn to satisfy it’s owners, lenders and…

DISCOUNTED CASH FLOW MODEL

The following post is in continuation with the previous one, so I recommend that you read it first. DCF is a stock valuation model which uses the present value of future cash flows of a company to assess the present fair/intrinsic value of a company’s share. Translating the above paragraph from finance nerd to nerd:…

INTRO TO FUNDAMENTAL ANALYSIS

Fundamental Analysis in the simplest of terms can be defined as the analysis of a company’s financial statements, the economy, the competition, and the overall market. It can have quite a few objectives, depending upon the user. But our focus being the stock market, I’ll talk about the use of fundamental analysis to calculate the…


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