Heads Up2: Nominal WACC

CFA Level II
#1

What’s the nominal WACC if real WACC is 9% and expected inflation is 40%? It is close to:

A. 53%

B. 13%

c. 49%

#2

Nominal WACC = {(1.09) (1.4)} - 1 = 52.6% = 53%

#3

(1+Nominal)=(1+REal)*(1+Inflation)

#4

53%

#5

A

Well done.

#6

IF only they were this easy in the exam