What is “Weighted Average Cost of Capital” and how is it used in equity valuation? Which is...

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Finance

What is “Weighted Average Cost of Capital” and how is it used inequity valuation?
Which is the better model for valuation when earnings quality isa major concern, DCF or ROPI? Explain.
Discuss why NOPAT is used in calculating the value of a companyinstead of net income in the ROPI equity valuation model.

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As per policy only one question can be answered at a time but here two questions are answered for you 1 The weighted average cost of capital WACC is an average cost of capital which See Answer

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What is “Weighted Average Cost of Capital” and how is it used inequity valuation?Which is the better model for valuation when earnings quality isa major concern, DCF or ROPI? Explain.Discuss why NOPAT is used in calculating the value of a companyinstead of net income in the ROPI equity valuation model.