The Weighted Average Cost of Capital (WACC) is a key factor in determining a company's economic earnings. It represents the average rate that a company is expected to pay to finance its assets. When WACC increases, it means the cost of financing assets is higher, which can reduce a company's profitability and thus its stock price. This can affect the S&P 500 index, which measures the stock performance of 500 large companies. Conversely, a decrease in WACC can increase profitability and potentially boost stock prices, positively impacting the S&P 500.
Need help with which companies or projects to invest in? As a key driver of value in business, ROIC...
Download model