PDF Publication Title:
Text from PDF Page: 019
Thus, if the stock of a firm pays a $2 dividend that is expected to grow at an annual rate of 5% and the current market price of the stock is $24, the rate of return on common equity is 13.3%. The overall WACC is based not only on the cost of the existing capital but also on the structure or distributionofthecapital. ThegeneralWAC@formula~oniscalculatedby: WACC=r,[C, f(C,+Ps+D)]+rep[Ps+(C, +Ps+D)]+(1 -T)rd[D+(C,+Ps+D)] (2-5) Where: = rate of return on common equity = common stock and corporate retained earnings (Weston and Brigharn 2981) PS = preferred stock D = debt issues = rate of return on preferred stock T = corporate tax rate’ Tee C, rd = interest rate paid on debt. As an example of using the WACC formula, suppose the capital structure of a regulated utility consists of 46% debt at an embedded after-tax nominal cost of 5.6%, 8% preferred stock at an embedded nominal cost of 8.4%, and 46% common equity at a nominal cost of 13.0%. Table 2-3 shows the WACC calculation. Security Common Stock % of Total 46 3 46 Cost (“3) 5.6’ 8.4 13.0 Return (“3) 2.59 -0.67 5.98 WACC = 9.2 Table2-3. WACCCalculationTable “The EPRl TAG recommends a nominal before-tax cost of debt of 9.1% and an effective tax rate of 38%. This translates into an after-tax cost of debt of approximately 5.6% because interestistaxdeductible;i.e., (1-0.38)(9.1). In this example, the WACC is 9.2%, which is the WACC recommended by EPRI for use in analyses related to electric utilities. As previously stated, if this had been a private competitive firm, the correct cost components for debt and preferred stock would have been based on the cost of new issues. The WACC value derived would then be called the MCC or the weighted average cost of new capital 8The corporate tax rate includes both state and €ederal income tax rates. The effective tax rate, or combined state and federal tax rate, which accounts for the fact that state taxes are deductible on federal returns, can be calculated as: Effective Tax Rate = State Tax Rate + Federal Tax Rate (1 - State Tax Rate).PDF Image | A Manual for the Economic Evaluation of Energy Efficiency and Renewable Energy Technologies
PDF Search Title:
A Manual for the Economic Evaluation of Energy Efficiency and Renewable Energy TechnologiesOriginal File Name Searched:
5173.pdfDIY PDF Search: Google It | Yahoo | Bing
NFT (Non Fungible Token): Buy our tech, design, development or system NFT and become part of our tech NFT network... More Info
IT XR Project Redstone NFT Available for Sale: NFT for high tech turbine design with one part 3D printed counter-rotating energy turbine. Be part of the future with this NFT. Can be bought and sold but only one design NFT exists. Royalties go to the developer (Infinity) to keep enhancing design and applications... More Info
Infinity Turbine IT XR Project Redstone Design: NFT for sale... NFT for high tech turbine design with one part 3D printed counter-rotating energy turbine. Includes all rights to this turbine design, including license for Fluid Handling Block I and II for the turbine assembly and housing. The NFT includes the blueprints (cad/cam), revenue streams, and all future development of the IT XR Project Redstone... More Info
Infinity Turbine ROT Radial Outflow Turbine 24 Design and Worldwide Rights: NFT for sale... NFT for the ROT 24 energy turbine. Be part of the future with this NFT. This design can be bought and sold but only one design NFT exists. You may manufacture the unit, or get the revenues from its sale from Infinity Turbine. Royalties go to the developer (Infinity) to keep enhancing design and applications... More Info
Infinity Supercritical CO2 10 Liter Extractor Design and Worldwide Rights: The Infinity Supercritical 10L CO2 extractor is for botanical oil extraction, which is rich in terpenes and can produce shelf ready full spectrum oil. With over 5 years of development, this industry leader mature extractor machine has been sold since 2015 and is part of many profitable businesses. The process can also be used for electrowinning, e-waste recycling, and lithium battery recycling, gold mining electronic wastes, precious metals. CO2 can also be used in a reverse fuel cell with nafion to make a gas-to-liquids fuel, such as methanol, ethanol and butanol or ethylene. Supercritical CO2 has also been used for treating nafion to make it more effective catalyst. This NFT is for the purchase of worldwide rights which includes the design. More Info
NFT (Non Fungible Token): Buy our tech, design, development or system NFT and become part of our tech NFT network... More Info
Infinity Turbine Products: Special for this month, any plans are $10,000 for complete Cad/Cam blueprints. License is for one build. Try before you buy a production license. May pay by Bitcoin or other Crypto. Products Page... More Info
CONTACT TEL: 608-238-6001 Email: greg@infinityturbine.com (Standard Web Page)