Weighted Average Cost of Capital in Forex Trading

The Weighted Average Cost of Capital (WACC) is an important concept in finance. It is used to measure the cost of financing or the average return that is required to satisfy a company’s shareholders and debt holders. It is comprised of the cost of equity, preferred stock, and debt capital and can be expressed as a percentage. In the forex market, the WACC is used to calculate the break-even point for a trade, which is when a trade’s returns match the cost of capital. By understanding WACC, traders can be better prepared when analyzing trades and managing their capital.