Weighted average cost of capital (WACC) is the sum of the required market returns of each component of corporate capitalization, weighted by that component's share of the total capitalization. [Source: Casualty Actuarial Society (CAS) Overview of Enterprise Risk Management]
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Earnings before interest, dividends, taxes, depreciation and amortization (EBITDA) is a form of cash flow measure, useful for evaluating the operating performance of companies with high levels of debt (when the debt service costs may overwhelm other measures such as net income). [Source: Casualty Actuarial Society (CAS) Overview of Enterprise Risk Management ]
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Risk control is the process of identifying, monitoring, limiting, avoiding, offsetting and transferring risks. The primary objective of risk control is to maintain the risks that have been retained by the enterprise at levels that are consistent with company risk appetites and company plans. Risk control is most effective if it is applied universally throughout the organization, but can still be very useful if applied separately to divisions or business units of an enterprise. [Source: Society of Actuaries (SOA) Enterprise Risk Management Specialty Guide]
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