BUSINESS INFORM №7-2014

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47

Section: Finance, Money Circulation and Credit
UDC 338.51:336.717
Kononenko O. T.
Version of the Calculation Methodology of WACC for Banks in Ukraine (p. 264 - 269)
In the article on the basis of analysis of the goals of functioning of banking institutions the main methods of valuation of banks were highlighted. The most effective methods are to use the income method by calculating the WACC. Using an existing formula for calculating WACC is not possible in the Ukrainian realities. In this connection, a procedure was developed for calculating WACC for banking institutions, adapted to the Ukrainian economy. The proposed method of calculation allows you to display the actual profitability of the bank, taking into account the inflation factor, the risk factor economical development of the country and the capital structure of the institution. The technique involves the assessment of WACC as with regard to the internal capabilities by the bank specialists, and also the calculation for foreign investors. The proposed method of calculating the WACC allows you to compare the results with a lower limit of return on assets and can be the basis for the calculation of the future cash flows of the bank as the main indicator of the goal of the banking institutions.
Keywords: purpose of the bank, the income method, cash flow, WACC, risk ratio, the bank\'s capital
Tabl.: 1. Formulae: 7. Bibl.: 8.

Kononenko Olena T. – Postgraduate Student, Department of Banking, Donetsk National University of Economics and Trade named after Mykhailo Tugan-Baranovsky (16 Tramvaina Str., Kryvyi Rih, Dnipropetrovsk region, 50005, Ukraine)
Email: [email protected]

Article is written in Ukrainian
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Reference to this article:
Kononenko, Olena T. (2014) “Version of the Calculation Methodology of WACC for Banks in Ukraine.” Business Inform 7:264–269.

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