HKUDS/Vibe-Trading · error · ValuationError

wacc: market value of equity plus debt is zero (D + E = 0);

Error message

wacc: market value of equity plus debt is zero (D + E = 0); capital-structure weights are undefined

What it means

With basis 'current', wacc() computes weights as E/(D+E) and D/(D+E); if both market values are zero (or sum to <= 0, which given non-negative validation means both zero), the weights are mathematically undefined and a ValuationError is raised instead of returning NaN.

Source

Thrown at agent/src/quantlib/valuation/dcf.py:458

        missing = [
            name
            for name, value in (
                ("market_value_of_equity", market_value_of_equity),
                ("market_value_of_debt", market_value_of_debt),
            )
            if value is None
        ]
        if missing:
            raise MissingInputError(missing, "wacc")
        equity_mv = _require_nonnegative(
            market_value_of_equity, "market_value_of_equity", "wacc"
        )
        debt_mv = _require_nonnegative(
            market_value_of_debt, "market_value_of_debt", "wacc"
        )
        total_mv = equity_mv + debt_mv
        if total_mv <= 0.0:
            raise ValuationError(
                "wacc: market value of equity plus debt is zero (D + E = 0); "
                "capital-structure weights are undefined"
            )
        equity_weight = equity_mv / total_mv
        debt_weight = debt_mv / total_mv
    else:
        missing = [
            name
            for name, value in (
                ("target_equity_weight", target_equity_weight),
                ("target_debt_weight", target_debt_weight),
            )
            if value is None
        ]
        if missing:
            raise MissingInputError(missing, "wacc")
        equity_weight = _require_finite(
            target_equity_weight, "target_equity_weight", "wacc"

View on GitHub (pinned to 80ffdda44c)

Solutions

1. Skip entities with zero total market value or handle them in a separate branch
2. Use capital_structure_basis='target' with target weights for such entities
3. Pre-filter input rows: if equity_mv + debt_mv <= 0, exclude before calling wacc

Example fix

# before
for row in rows:
    wacc(..., market_value_of_equity=row['e_mv'], market_value_of_debt=row['d_mv'])

# after
for row in rows:
    if row['e_mv'] + row['d_mv'] <= 0:
        continue
    wacc(..., market_value_of_equity=row['e_mv'], market_value_of_debt=row['d_mv'])

if (e_mv or 0) + (d_mv or 0) <= 0:
    skip(ticker, reason='zero market cap')
wacc(..., market_value_of_equity=e_mv, market_value_of_debt=d_mv)

def has_positive_total_mv(e_mv: float, d_mv: float) -> bool:
    return (e_mv + d_mv) > 0

try:
    wacc(...)
except ValuationError as e:
    if 'D + E = 0' in str(e):
        return wacc(..., capital_structure_basis='target', target_equity_weight=1.0, target_debt_weight=0.0)
    raise

When it happens

Trigger: wacc(capital_structure_basis='current', market_value_of_equity=0, market_value_of_debt=0) — e.g. a pre-IPO shell entity or a placeholder row of zeros in a dataset.

Common situations: Screening universes containing shell/holding companies with zero market cap; default-zero rows from joins where the market-data fetch failed.

Related errors

• {model}: {name} must be a number, got {value!r}
• {model}: capital-structure weights must be non-negative, got
• {model}: capital-structure weights must sum to 1 (within {_R
• WACCResult.wacc={self.wacc!r} does not match the weighted bl
• wacc: capital_structure_basis must be one of {CAPITAL_STRUCT

AI-assisted analysis of HKUDS/Vibe-Trading@80ffdda44c (2026-08-28). Data as JSON: /api/errors/8b2b83febbcdd530. Report an issue: GitHub.