Title: Comparison: Taguchi method and full factorial design in WACC

Authors: Amir Ahmad Dar; Zameer Gulzar; Ramesh A. Babu; Layak Ali; G. Shreedevi

Addresses: Department of Statistics, School of Chemical Engineering and Physical Sciences, Lovely Professional University, Punjab, India ' School of CS&AI, SR University, Warangal, Telangana, India ' School of CS&AI, SR University, Warangal, Telangana, India ' Department of Electronics and Communication Engineering, Central University of Karnataka, India ' Department of Computer Applications, BSAR Crescent Institute of Science and Technology, Chennai, India

Abstract: To examine the effectiveness of two different experimental design techniques, Taguchi and full factorial design (FFD), in optimising the weighted average cost of capital (WACC). Several input variables, including total equity, total debt, tax rates, cost of debt, and cost of equity, have an impact on WACC. To set up trials and determine the optimal combination of these input elements for WACC, the Taguchi methodology was used. The Taguchi method is being applied for the first time to find the optimal combination for the cost of capital. The study uses the Taguchi L16 DOE, regression analysis, and the analysis of means (ANOM), all of which are carried out using the MINITAB 18 Software, to examine the effects of various input components. The experiment's results show that the Taguchi method and the FFD produce comparable performance results.

Keywords: Taguchi method; full factorial design; weighted average cost of capital; WACC; analysis of means; ANOM; regression.

DOI: 10.1504/IJIE.2024.139777

International Journal of Intelligent Enterprise, 2024 Vol.11 No.3, pp.300 - 315

Accepted: 20 Feb 2024
Published online: 05 Jul 2024 *

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