%%form_raw{company_name}%% (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for %%form_raw{company_name}%%'s Analysis

What is the WACC Formula? Analyst use the WACC Discount Rate (weighted average cost of capital) to determine %%form_raw{company_name}%%'s investment risk. WACC Formula = Cost of Equity (CAPM) * Common Equity + (Cost of Debt) * Total Debt. The result of this calculation is an essential input for the discounted cash flow (DCF) analysis for %%form_raw{company_name}%%. Value Investing Importance? This method is widely used by investment professionals to determine the correct price for investments in %%form_raw{company_name}%% before they make value investing decisions. This WACC analysis is used in %%form_raw{company_name}%%'s discounted cash flow (DCF) valuation and see how the WACC calculation affect's %%form_raw{company_name}%%'s company valuation.

WACC Analysis Information

1. The WACC (discount rate) calculation for %%form_raw{company_name}%% uses comparable companies to produce a single WACC (discount rate). An industry average WACC (discount rate) is the most accurate for %%form_raw{company_name}%% over the long term. If there are any short-term differences between the industry WACC and %%form_raw{company_name}%%'s WACC (discount rate), then %%form_raw{company_name}%% is more likely to revert to the industry WACC (discount rate) over the long term.

2. The WACC calculation uses the higher of %%form_raw{company_name}%%'s WACC or the risk free rate, because no investment can have a cost of capital that is better than risk free. This situation may occur if the beta is negative and %%form_raw{company_name}%% uses a significant proportion of equity capital.


  label: Company Name*
  required: true

  label: Admin
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