Opportunity Cost Of Capital Equation. The opportunity cost of capital is the difference between the returns on the two projects. If we think about the cost of opportunity like this then the equation is very easy to understand and it s straightforward.
Wacc formula wacc wacc is a firm s weighted average cost of capital and represents its blended cost of capital including equity and debt. The opportunity cost of capital let s say i could have gotten 5 on my 2 000 000. The best way to calculate the opportunity cost of capital is to compare the return on investment on two different projects.
Popular course in this category.
Cost of capital 1 500 000. Opportunity cost 2 100 000. My opportunity cost of capital is 100 000. The wacc formula is e v x re d v x rd x 1 t.
