The weight of debt and equity are important components of the WACC. The WACC which you use as your discount rate in most DCF models plays a big role in the resulting valuation. It is important to get this right. Would you prefer to use the market value weights or book value weights of debt and equity to arrive at the weights when computing WACC?

We address this question here on this page: “Do you use market value weights or book value weights of debt and equity to arrive at the weights when computing WACC?

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