A simple example reveals that the existing weighted average cost of capital (WACC) formula for valuation conflicts with the principle of value additivity.

一个简单的例子揭示了现有的加权平均资本成本(WACC)计算公式违背了价值的可加性原理。

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WACC Weighted average cost of capital: The rate of return that must be earned to satisfy all investor expectations.

资本加权平均值能使所有投资者满意的资本回报率。

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It would need to nearly triple this ROIC to exceed its weighted average cost of capital ( WACC) of 8.2%.

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It would need to double this to cover its 8% weighted average cost of capital ( WACC) and start earning positive economic profits.

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