Course Outline

 


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:

  • Cost of debt financing
  • Cost of equity financing
  • Capital structure (gearing levels)
  • Exchange rate risk
  • Treatment of taxes

Course Programme

Live Sessions are starting at 09:00 CET (GMT+1, Budapest) | Convert to your time zone here.


November 23 from 09:30 CET: ORIENTATION DAY & SYSTEM TEST FOR PARTICIPANTS

WEEK 1
November 29 - December 3

WEEK 2
December 3 - 10

Introduction to the WACC and the cost of dept:

  • Forms of WACC impacts on allowed revenues
  • Cost of debt, Proxy values, Setting the Debt Risk Premium

The capital asset pricing model:

  • Capital Asset Pricing Model I. and II.

Efficient gearing levels and cost of equity:

  • Efficient gearing levels: theory and regulatory practice
  • Estimating the cost of equity

Real vs. nominal WACC and RAB indexation:

  • Excel Exercise: Calculating the WACC

For detailed course agenda please contact the ERRA Secretariat


COURSE FACULTY TEAM 

ERRA WACC Training Faculty Team (2021)

Registration

Tuition Fees:

  • ERRA Members: 450 EUR
  • Non-ERRA Members: 700 EUR

Methodology

Proposed weekly engagement: 10-12 hours
Instructor-led real-time recorded presentations Excel modeling
Online Tutoring

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 will run for 2 weeks with the following weekly sequence:

Day 1:
Real-time presentations on the presented materials. Presentations and related excel modeling will be followed by Q&A sessions. Presentations will be recorded and made available to those who could not join the real-time presentations.

Day 2:
Real-time presentations on the presented materials. Presentations and related excel modeling will be followed by Q&A sessions. Presentations will be recorded and made available to those who could not join the real-time presentations.

Day 3:
Self-paced work.

Day 4:
Online tutoring for the duration of 1 hour.

At the end of the course a Certificate of Attendance will be granted to participants. No CER credits are awarded for completing this course.

 


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