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I’ve never seen this before. Where did you come across it? As far as I have seen, it would be totally inappropriate to use this “cost of debt” in the WACC calculation.Nickitozz92 wrote:
Hi folk) I have came across very spicific calculation Cost of Debt . Here it is Net Income /Liabilities.Is it appropriate way of calculation .Because it is more often accepted to use the yield to maturity on company’s bond.Do we have the right to use both methods of calculation cost of debt working out WACC?
Thanks in advance)
To put it mildly, this calculation makes no sense.Nickitozz92 wrote:Here it is Net Income /Liabilities. Is it appropriate way of calculation.
This is what I thought, but because he’s referring to himself as “Dr. so and so”, I assumed he had a degree. I left the possibility that maybe I just hadn’t heard of this method (except it never showed up anywhere, including a course textbook on the theory of finance). In any case, it’s kind of scary that he’s teaching the wrong stuff…S2000magician wrote:
To put it mildly, this calculation makes no sense.Nickitozz92 wrote:Here it is Net Income /Liabilities. Is it appropriate way of calculation.
I’m trying hard to forget I ever saw it. I encourage you to do the same.
I didn’t listen to the video, but the original description is crazy talk: I earned more income this year so, consequently, my cost of debt increased?tickersu wrote:
This is what I thought, but because he’s referring to himself as “Dr. so and so”, I assumed he had a degree. I left the possibility that maybe I just hadn’t heard of this method (except it never showed up anywhere, including a course textbook on the theory of finance). In any case, it’s kind of scary that he’s teaching the wrong stuff…S2000magician wrote:
To put it mildly, this calculation makes no sense.Nickitozz92 wrote:Here it is Net Income /Liabilities. Is it appropriate way of calculation.
I’m trying hard to forget I ever saw it. I encourage you to do the same.
Must have been a fly-by-night pay-for-your degree school…S2000magician wrote:
I didn’t listen to the video, but the original description is crazy talk: I earned more income this year so, consequently, my cost of debt increased?tickersu wrote:
This is what I thought, but because he’s referring to himself as “Dr. so and so”, I assumed he had a degree. I left the possibility that maybe I just hadn’t heard of this method (except it never showed up anywhere, including a course textbook on the theory of finance). In any case, it’s kind of scary that he’s teaching the wrong stuff…S2000magician wrote:
To put it mildly, this calculation makes no sense.Nickitozz92 wrote:Here it is Net Income /Liabilities. Is it appropriate way of calculation.
I’m trying hard to forget I ever saw it. I encourage you to do the same.
Tommyrot!
As for him referring to himself as “Dr. so and so”: years ago I worked for a gentleman who had a PhD in physics who didn’t understand a simply linear equation with one independent variable. Many PhDs haven’t a clue.
Which one: this finance guy’s, or my physics guy’s?tickersu wrote:
Must have been a fly-by-night pay-for-your degree school…S2000magician wrote:
I didn’t listen to the video, but the original description is crazy talk: I earned more income this year so, consequently, my cost of debt increased?tickersu wrote:
This is what I thought, but because he’s referring to himself as “Dr. so and so”, I assumed he had a degree. I left the possibility that maybe I just hadn’t heard of this method (except it never showed up anywhere, including a course textbook on the theory of finance). In any case, it’s kind of scary that he’s teaching the wrong stuff…S2000magician wrote:
To put it mildly, this calculation makes no sense.Nickitozz92 wrote:Here it is Net Income /Liabilities. Is it appropriate way of calculation.
I’m trying hard to forget I ever saw it. I encourage you to do the same.
Tommyrot!
As for him referring to himself as “Dr. so and so”: years ago I worked for a gentleman who had a PhD in physics who didn’t understand a simply linear equation with one independent variable. Many PhDs haven’t a clue.
Probably this “finance” guy, but who knows. I’m sure the physics guy went to a legitmate school (not necessarily good) and somehow fell through the cracks.S2000magician wrote:
Which one: this finance guy’s, or my physics guy’s?tickersu wrote:
Must have been a fly-by-night pay-for-your degree school…S2000magician wrote:
I didn’t listen to the video, but the original description is crazy talk: I earned more income this year so, consequently, my cost of debt increased?tickersu wrote:
This is what I thought, but because he’s referring to himself as “Dr. so and so”, I assumed he had a degree. I left the possibility that maybe I just hadn’t heard of this method (except it never showed up anywhere, including a course textbook on the theory of finance). In any case, it’s kind of scary that he’s teaching the wrong stuff…S2000magician wrote:
To put it mildly, this calculation makes no sense.Nickitozz92 wrote:Here it is Net Income /Liabilities. Is it appropriate way of calculation.
I’m trying hard to forget I ever saw it. I encourage you to do the same.
Tommyrot!
As for him referring to himself as “Dr. so and so”: years ago I worked for a gentleman who had a PhD in physics who didn’t understand a simply linear equation with one independent variable. Many PhDs haven’t a clue.