Today, I went back to Vlerick …

I maybe should have posted more about the life as a Vlerick alumni :-) Anyway, after … ooops! already 2 years, I went back to Vlerick, in its Leuven campus, in breakout room 006, with a suit (no tie) and for an interview. But this time I had the great honor to be a jury member for the MGM.

Vlerick Admissions test binder

I will not write about how to succeed in this type of test (I blogged about it before and other websites might do it better than myself). However it was interesting to see adaptations from Vlerick and the motivation of some students.

For Vlerick, a lot changed since I did my admission test in Vlerick. There is a new logo and branding, a new campus in Brussels, they reorganised the MBA program, ranking improved a bit, etc. But it was very nice to see and meet again familiar faces like Mathieu Luypaert and Marion Debruyne, to sit on chairs that prevents you from sleeping in breakout rooms – like before, to taste the (improved) food of the cafeteria, …

And, last but not least, independently of their success in this assessment, I was also impressed by the motivation of the students, the diversity of their backgrounds, their eagerness to join Vlerick. Well, for some of the students at least ;-) But if you feel the need to start/improve your business knowledge in Belgium, I would encourage you to consider joining Vlerick – and show your enthusiasm from the first to the last minute of the interview!

Wacc! Wacc!

Duck 3Yesterday in the Corporate Financial Management class, Prof. Dr. Mathieu Luypaert talked again about the WACC. As I arrived late and it’s not a habit, my attention level was maybe a bit higher than when I arrive on time ;-) So I became more interested in the WACC …

The WACC (Weighted Average Cost of Capital) is defined as “the rate that a company is expected to pay on average to all its security holders to finance its assets” (Wikipedia). It is then very different than the sound of a duck (btw the latter is also spelled differently: “quack”). As usual, Investopedia has the exact same formula Prof. Luypaert gave us (always cross-check ;-) – legend in the Investopedia article) and a nice explanation video …

WACC formula (from Investopedia)

Now, as I am working in the pharmaceutical sector, I was interested in the WACCs of pharma companies. For that purpose, Wikiwealth seems to give a straightforward way to get this value. Here are the WACCs of top pharma companies according to Wikiwealth (as of Feb. 2012):

Company WACC
Abbott (ABT) 7%
AstraZeneca 7%
Novartis (NVS) 7%
Johnson & Johnson (JNJ) 7%
Merck & Co. (MRK) 7%
Eli Lilly & Co. (LLY) 8%
GlaxoSmithKline (GSK) 8%
Pfizer (PFE) 8%
Sanofi-Aventis (SNY) 8%

So the WACC of pharma companies is around 7-8%. It’s a bit less that Apple (10%) – I know the comparison is stupid but I don’t think we had any class recently that didn’t mention that company. I was also briefly looking at other big, well-known companies and found that, according to Wikiwealth, their WACCs are around 7-9% for most of them. Some notable exceptions are for instance Kellogg (at 6%) or, at the other end of the spectrum, UBS (at 12%) or HSBC (at 14%).

With that, I’m leaving you here and heading for 6-7 hours of Corporate Financial Management …

Photo credit: Duck 3 by Phil_Parker on Flickr (CC-by)

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