Total Capital

CFA Level II
#1

Dear:

I am so confused about the definition of total capital. Is it equal to total Assets? so many definitionns for this term.

Thanks

#2

I think it depends on how it is used. Total capital can be MV of debt + MV of equity or in Fixed income its defined as LTD + Minority interest + common an pf equity. In another variant current liabilites are included. I am sure there are other definitions too but I don’t know of one that uses Assets as = to total capital. The company is financed though either debt or equity capital so I think the definition will be based on either MV or BV of those two items.

#3

Is this formula the one that confuses you? NOPAT -WACCxTC …Seems so simple, always confuses me though!