Many REITs talk about Weighted Average Cost of Capital, or WACC. We look at three of them, from the Net Lease sector. While WACC is of some use empirically, it is Return On Equity that matters more.

The cost of capital is typically calculated using the weighted average cost of capital (WACC), which accounts for the proportional costs of both debt and equity in the company’s capital structure.

Bankruptcy Costs . Higher costs of capital and an elevated degree of risk may, in turn, increase the risk of bankruptcy. As the company adds more debt to its capital structure, the company's WACC ...