The ERRA online training on setting the Weighted Average Cost of Capital (WACC) will review one of the most critical regulatory determinations in the tariff setting process. The training will couple theoretical discussions determining the cost of debt and cost of equity of regulated licensees, and the manner in which these are optimally weighted to ensure an efficient and sustainable financing structure, with practical exercises and case-study examples from previous regulatory determinations.
What you will learn:
- Various forms of WACC and the manner in which these affect allowed revenues;
- Regulatory approaches to estimating the cost of debt, factoring in country-specific risks;
- Optimal gearing levels balancing financing efficiency and solvency;
- Estimating return on equity, with emphasis on the CAPM model.
Course Agenda
- Forms of WACC impacts on allowed revenues
- Cost of debt, Proxy values, Setting the Debt Risk Premium
- Efficient gearing levels: theory and regulatory practice
- Estimating the cost of equity
- Capital Asset Pricing Model I. - II.
- Excel Exercise: Calculating the WACC
For detailed agenda please contact the ERRA Secretariat.
Course Faculty Team
Methodology
The training is based on a self-paced collaborative e-learning platform that features a combination of real-time interactive presentations by the instructors, Excel modeling exercises, online tutoring at pre-announced times, reading material related to the course modules.
The course runs for 2 weeks with the following weekly sequence:
Day 1
Real-time presentations on the presented materials. Presentations will be followed by Q&A sessions. Presentations will be recorded and made available to those who could not join the real-time presentations. Distribution of weekly assignments.
Day 2
Real-time presentations on the presented materials. Presentations will be followed by Q&A sessions. Presentations will be recorded and made available to those who could not join the real-time presentations. Distribution of weekly assignments.
Day 3
Self-paced work.Day 4
Online tutoring for the duration of 1 hour.Completion
At the end of the course a Certificate of Attendance will be granted to participants. No CER credits are awarded for completing this course.
Student Testimonials
I thoroughly enjoyed the course and the course content. The instructors are qualified subject matter experts who apply a great deal of detail in communicating difficult concepts and so make learning a lot easier.
This course was very useful and effective for me. I will use the knowledge gained in my work. Tamika Chevallier, Regulated Industries Commission, Trinidad and Tobago
overall rating of the course