Weighted Average Book Value Formula

Calculating weighted average in excel.

Weighted average book value formula. Formula to calculate weighted average weighted average is a type of an average that takes into account the relative importance of each value under consideration and is calculated by multiplying the respective weights in percentage terms with its corresponding value weighted average formula w1x1 w2x2 wnxn. Weighted average 30 80 40 65 15 85 15 90 weighted average 76 25 or 76. Wacc abbreviates for the average weighted cost of capital.

Calculating weighted average by using the sum. First the average function below calculates the normal average of three scores. Wacc e v r e d v r d 1 t c where.

In microsoft excel weighted average is calculated using the same approach but with far less effort because excel functions will do most of the work for you. Weighted average cost of capital formula 86 319 8 90133 8 x 7 50 3814 90133 8 x 2 72 x 1 0 329 weighted average cost of capital 7 26 limitations. As you see a normal average grade 75 4 and weighted average 73 5 are different values.

X research source to find your weighted average simply multiply each number by its weight factor and then sum the resulting numbers up. It represents the overall financing cost which accounts the cost of all existing financing resources in the business such as debt. To calculate a weighted average in excel simply use sumproduct and sum.

It assumes that there would be no change in the capital structure which isn t possible for all over the years and if there is any need to source more funds. Re cost of equity rd cost of debt e market value of the firm s equity d market value of the firm s debt v e d total. Suppose your teacher says the test counts twice as much as the quiz and the final exam counts three times as much as the quiz.

Example 3 let s assume jagriti have invested money in stocks of different companies. This shows the overall grade of anand is 76.