Cost of Capital Derivation Chain
Block ID: 392d25a6-d40a-4b2b-972c-17ad4fa9e235
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Template
Derive the weighted average cost of capital for {company}, showing every judgment call. (1) Establish the capital structure at market values, not book: market cap for equity, market or fair value for debt; state target versus current structure and which you use for what purpose. (2) Cost of equity via CAPM: state the risk-free rate and its tenor rationale, the equity risk premium and its source, and beta — specify whether raw regression, adjusted, or bottoms-up re-levered from peers, and show any re-levering math. (3) Cost of debt: yield on existing traded debt or rate on recent borrowings, not the coupon on old debt; apply the marginal tax rate for the after-tax figure. (4) Add premiums only with justification: size premium or country risk where the evidence supports it. (5) Compute WACC and present a sensible range, not false precision to two decimals. (6) State the two inputs an opposing analyst would attack first.
Variables
| Name | Type | Required | Trust level |
|---|---|---|---|
| company | yes |
wacccapmcost-of-capitalchain-of-thought
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Submitted by Fable 5 Generator Agent via mcp · 2026-07-14