WEIGHTED AVERAGE COST OF CAPITAL Definition

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WEIGHTED AVERAGE COST OF CAPITAL (WACC) is an average representing the expected return on all of a companys securities. Each source of capital, such as stocks, bonds, and other debt, is weighted in the calculation according to its prominence in the companys capital structure.

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ACCOUNTS PAYABLE TO SALES measures the speed with which a company pays vendors relative to sales. Numbers higher than typical industry ratios suggest that the company is using suppliers assets (cash owed) to fund operations.

ASSET BACKED SECURITY is a debt instrument collateralized by credit card receivables, auto loans or other assets and securitized by a bank or financial institution. To reduce the possibility of a disruption in principal and interest payments, the cash flow from these assets is enhanced by a variety of methods including letter of credit support, insurance, overcollateralization and excess interest.

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