{"id":44438,"date":"2019-09-24T00:00:00","date_gmt":"2019-09-23T22:00:00","guid":{"rendered":"https:\/\/techma.bakertilly.es\/errores-en-la-valoracion-relacionados-con-el-coste-de-capital\/"},"modified":"2025-03-10T13:54:27","modified_gmt":"2025-03-10T12:54:27","slug":"coste-de-capital-errores-valoracion","status":"publish","type":"diccionario","link":"https:\/\/techma.bakertilly.es\/en\/como-hacer\/coste-de-capital-errores-valoracion\/","title":{"rendered":"Cost of Capital: errors in valuation"},"content":{"rendered":"<p>Among the different existing methods for valuing companies related to the cost of capital, the discounted cash flow method is undoubtedly one of the most widely used. However, its greatest difficulty lies in calculating the appropriate discount rate, a task that is not exempt from numerous errors that are frequently made and which we will explain in the following lines.<br><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Contents\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewbox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewbox=\"0 0 24 24\" version=\"1.2\" baseprofile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/techma.bakertilly.es\/en\/como-hacer\/coste-de-capital-errores-valoracion\/#%C2%BFQue_es_el_metodo_de_Descuento_de_Flujos_de_Caja_DCF\" >What is the Discounted Cash Flow (DCF) method?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/techma.bakertilly.es\/en\/como-hacer\/coste-de-capital-errores-valoracion\/#DEFINICION_ERRONEA_DEL_WACC\" >WRONG DEFINITION OF WACC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/techma.bakertilly.es\/en\/como-hacer\/coste-de-capital-errores-valoracion\/#SUPONER_UNA_ESTRUCTURA_DE_CAPITAL_CONSTANTE\" >ASSUME A CONSTANT CAPITAL STRUCTURE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/techma.bakertilly.es\/en\/como-hacer\/coste-de-capital-errores-valoracion\/#UTILIZAR_UN_WACC_INFERIOR_A_LA_TASA_SIN_RIESGO\" >USE A WACC LOWER THAN THE RISK-FREE RATE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/techma.bakertilly.es\/en\/como-hacer\/coste-de-capital-errores-valoracion\/#VALORAR_TODOS_LOS_NEGOCIOS_DE_UNA_EMPRESA_DIVERSIFICADA_UTILIZANDO_EL_MISMO_WACC\" >VALUING ALL THE BUSINESSES OF A DIVERSIFIED COMPANY USING THE SAME WACC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/techma.bakertilly.es\/en\/como-hacer\/coste-de-capital-errores-valoracion\/#SUPONER_QUE_EXISTE_UN_UNICO_WACC\" >ASSUME THAT THERE IS A SINGLE WACC<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"%C2%BFQue_es_el_metodo_de_Descuento_de_Flujos_de_Caja_DCF\"><\/span>What is the Discounted Cash Flow (DCF) method?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The discounted cash flow method is based on the idea that the value of a company's shares, assuming its continuity and operation, reflects its capacity to generate cash for shareholders. Thus, the method requires the estimation of future cash flows and their discounting at a rate appropriate to the cash flow rate used.<\/p>\n\n\n\n<p>The calculation of cash flows is based on the different financial items linked to the generation of cash flows (e.g. sales collections, labor payments, repayment of receivables...) and their detailed and careful forecasting. Once the projections have been obtained, the cash flow to be used must be selected, as the discount rate to be used will depend on this choice. Thus, the different cash flows correspond to the following discount rates:<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img decoding=\"async\" width=\"951\" height=\"233\" src=\"https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2021\/04\/Captura-1-1.png\" alt=\"cost of capital\" class=\"wp-image-49997\" style=\"width:718px;height:175px\" title=\"\" srcset=\"https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2021\/04\/Captura-1-1.png 951w, https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2021\/04\/Captura-1-1-300x74.png 300w, https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2021\/04\/Captura-1-1-768x188.png 768w, https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2021\/04\/Captura-1-1-600x147.png 600w\" sizes=\"(max-width: 951px) 100vw, 951px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"DEFINICION_ERRONEA_DEL_WACC\"><\/span><br><br><strong>WRONG DEFINITION OF WACC<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>&nbsp;Given the multitude of existing concepts and formulas, it is common to confuse the definition of WACC with that of K<sub>e<\/sub>&nbsp;o la del&nbsp;K<sub>u<\/sub>&nbsp;among others. To avoid this mistake, the correct WACC formula should be remembered:&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image alignleft size-large is-resized\"><img decoding=\"async\" width=\"614\" height=\"102\" src=\"https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2021\/04\/Captura-f1.png\" alt=\"\" class=\"wp-image-49999\" style=\"width:432px;height:72px\" title=\"\" srcset=\"https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2021\/04\/Captura-f1.png 614w, https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2021\/04\/Captura-f1-300x50.png 300w, https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2021\/04\/Captura-f1-600x100.png 600w\" sizes=\"(max-width: 614px) 100vw, 614px\" \/><\/figure>\n\n\n<\/p>\n<p style=\"text-align: justify;\">where:<\/p>\n<\/p>\n<p><img decoding=\"async\" class=\"wp-image-50003 alignleft\" src=\"https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2019\/09\/Captura-f2-1-300x62.png\" alt=\"\" width=\"329\" height=\"68\" title=\"\" srcset=\"https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2019\/09\/Captura-f2-1-300x62.png 300w, https:\/\/techma.bakertilly.es\/wp-content\/uploads\/2019\/09\/Captura-f2-1.png 446w\" sizes=\"(max-width: 329px) 100vw, 329px\" \/><\/p>\n<\/p>\n<p style=\"text-align: justify;\">Ku=cost of unleveraged company equity<\/p>\n<p style=\"text-align: justify;\">Kd=cost of debt<\/p>\n<p style=\"text-align: justify;\">D=value of debt<\/p>\n<p style=\"text-align: justify;\">E=value of shares<\/p>\n<p style=\"text-align: justify;\">T=tax rate<\/p>\n<p>CALCULATING WACC USING DEBT AND EQUITY BOOK VALUES<\/p>\n<p style=\"text-align: justify;\">Observing the WACC formula above, the values of debt and equity should be used. These values should not be obtained from their book value but from their market value in order to be consistent with the definition and interpretation of the WACC.<\/p>\n<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"SUPONER_UNA_ESTRUCTURA_DE_CAPITAL_CONSTANTE\"><\/span>ASSUME A CONSTANT CAPITAL STRUCTURE<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">Since companies tend to vary their capital structure over the years, the WACC to be used should change for each period, adjusting to the expected debt for each year. A change in the amount of debt will affect the value of the shares and therefore the WACC.<\/p>\n<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"UTILIZAR_UN_WACC_INFERIOR_A_LA_TASA_SIN_RIESGO\"><\/span>USE A WACC LOWER THAN THE RISK-FREE RATE<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">El K<sub>e<\/sub> y K<sub>u<\/sub> must always be higher than the risk-free rate. However, the WACC can be lower than the risk-free rate only in the case of companies or investments with a very small risk.<\/p>\n<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"VALORAR_TODOS_LOS_NEGOCIOS_DE_UNA_EMPRESA_DIVERSIFICADA_UTILIZANDO_EL_MISMO_WACC\"><\/span>VALUING ALL THE BUSINESSES OF A DIVERSIFIED COMPANY USING THE SAME WACC<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">When valuing a company that has lines of business in different countries or industries, it is important to perform the valuation adjusting it to the specific circumstances of each business. Thus, the risk presented by a company's operations in Spain cannot be assimilated to those it might face in Venezuela, for example.<\/p>\n<\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"SUPONER_QUE_EXISTE_UN_UNICO_WACC\"><\/span>ASSUME THAT THERE IS A SINGLE WACC<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">It is clear that investors have different expectations about a company's cash flows and different assessments of their risk, which leads to different WACCs. Therefore, there is no single WACC that exists and can be obtained for all investors, but rather, depending on each investor's assessments and estimates, it will vary.<\/p>\n<p style=\"text-align: justify;\">Source: <a href=\"https:\/\/web.iese.edu\/PabloFernandez\/?_ga=2.145029876.1572506601.1561963440-1096857544.1561963440\" target=\"_blank\" rel=\"noopener\">201 Common errors in company valuation. 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