 All right, we're back We're gonna take a continue to take a look at weighted average cost of capital here And I'm just gonna do another little quick note on understanding beta This way to think about it and we're referring to this specific stock this company nova chemical its beta is 1.40 So when we consider that one is the market as a whole a Number that is positive above the market like this is indicating that this there's a real strong Correlation between the movement of the market and the movement of Nova stock in general But in this case what we're also what we also need to understand is that the stock is likely to move at a rate That's 40 percent more than the market as a whole So in an upmarket nova is likely to move at a rate that's 40 percent higher than the upmarket in a down market It's likely to move at a rate. That's 40 percent lower. It's gonna move down faster. It's gonna move up faster Just try to keep that in mind. So that's why it's such a critical piece to understanding The cost of equity. What is that? It's part of the risk factor in understanding an equity investment right we're gonna look over at this section of the Excel form and Managed to capture the whole thing here. So you'll see what we're basically looking at The goal is to arrive at this the weighted average cost of capital what it is you know what it is costing us to make an investment and The things we look at are we start at the top here and we look at debt This company is indicating that it has no short-term debt and basically what is generally agreed to as short-term debt in the accounting world is anything that will be paid off within one Reporting period so often people think of a reporting period as a year Businesses don't always run their their books by calendar years they they They have their own setup for that quite often, but it's a it's a period of time generally a year Long-term debt Can run out there's no there's no clear definition of how far it can run out But it's basically considered debt that is not paid off within one year so the total debt here if we're looking at this is one is 1.4 billion dollars if you do your math right so that's the total debt that the company has and It's arrived at simply by doing a very simple equation Before plus b6 so short-term debt plus long-term debt equals total debt All right, we move along. We're looking at shares in the company The thing we're trying to come up with is the market capitalization number and this is basically the price per share Times the number of outstanding shares and shares outstanding Very specifically refers to shares of the company that are in the marketplace that are owned by somebody in the marketplace So that's the number there. There could be other shares that are in a that are in the company's treasury account things like that They would not be counted here So this is the the market capitalization what the firm is worth In the stock market at a given point in time We're going to break that the next thing you look at is percentage of debt the percentage of debt is arrived at by doing a calculation of the the total debt times the total debt plus The market capitalization So that helps you arrive at the the debt number percentage of equity is arrived at by one minus B12 which is the the debt number here. So give you some sense of The breakdown here you're seeing that This company has a very strong equity position compared to debt So in our final video, we're just going to go right down in here and talk about WACC specifically And we will get to that in a minute