R/Wacc.R

In JancoS/EquityR: Common stock valuation methods. Including single stage DDM, multistage DDM and basic CF models. Package mainly builds on the tidyquant and finreportr packages.

#' @title WACC
#' @description Calculate a company's WACC based on cost of Equity and cost of debt. The fraction of debt and equity can be provided by the user. Otherwise, the function aims to calculate the weights based on most recent balance sheet data collected from the getBalancesheet function
#' @param Ticker The ticker of the company to evaluated
#' @param cost_Equity The cost of equity as a fraction
#' @param cost_Debt The cost of debt as a fraction
#' @param Tax_Rate The tax rate as percentage
#' @param cost_Pref The cost of Preferred stock as a fraction
#' @param Per_Equit Optional, the percentage equity
#' @param Per_Debt Optional, the percentage debt
#' @export
#' @return WACC Return the WACC object

WACC <- function(Ticker, cost_Equity, cost_Debt, cost_Pref, Tax_Rate, Per_Equity = 0, Per_Debt = 0) {

  # Check if the user provided the percentage Equity

  if (Per_Equity != 0 & Per_Debt != 0) {

    # The user provided the weights, so the WACC can be calculated

    Per_Pref <- 100 - Per_Equity - Per_Debt

    WACC <- (Per_Debt/100)*cost_Debt*(1-Tax_Rate/100) + (Per_Equity/100)*(cost_Equity) + (Per_Pref/100)*(cost_Pref)


  } else {

    # The user did not provide the fractions

    What_Year <- year(today()) - 1

    BS_Data <- GetBalanceSheet(Ticker, year = What_Year)

    # Calculate the weights based on the above collected Balance sheet data

    # Get common stock equity

    Common_Stock <- BS_Data %>% filter(Metric == "Common Stocks, Including Additional Paid in Capital")

    # Get preferred stock equity

    Preferred_Stock <- BS_Data %>% filter(Metric == "Convertible Preferred Stock, Nonredeemable or Redeemable, Issuer Option, Value")

    # Get long_term debt

    LT_Debt <- BS_Data %>% filter(Metric == "Long-term Debt, Excluding Current Maturities")

    Total <- Common_Stock + Preferred_Stock + LT_Debt

    Per_Equity <- Common_Stock/Total
    Per_Pref <- Preferred_Stock/Total
    Per_Debt <- LT_Debt/Total

    WACC <- (Per_Debt)*cost_Debt*(1-Tax_Rate/100) + (Per_Equity)*(cost_Equity) + (Per_Pref)*(cost_Pref)

  }

  # Return the calculated WACC

  return(WACC)

}