Agnico-Eagle Mines (Weighted Average Cost of Capital (WACC) Analysis)
Improve your investment analysis with by seeing the Agnico-Eagle Mines's Discounted Cash Flow analysis, Agnico-Eagle Mines's Warren Buffet analysis, and Agnico-Eagle Mines's Comparable Multiple analysis.
Helpful Information for Agnico-Eagle Mines's Analysis
What is the WACC Formula? Analyst use the WACC Discount Rate (weighted average cost of capital) to determine Agnico-Eagle Mines'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 Agnico-Eagle Mines. Value Investing Importance? This method is widely used by investment professionals to determine the correct price for investments in Agnico-Eagle Mines before they make value investing decisions. This WACC analysis is used in Agnico-Eagle Mines's discounted cash flow (DCF) valuation and see how the WACC calculation affect's Agnico-Eagle Mines's company valuation.
WACC Analysis Information
1. The WACC (discount rate) calculation for Agnico-Eagle Mines uses comparable companies to produce a single WACC (discount rate). An industry average WACC (discount rate) is the most accurate for Agnico-Eagle Mines over the long term. If there are any short-term differences between the industry WACC and Agnico-Eagle Mines's WACC (discount rate), then Agnico-Eagle Mines is more likely to revert to the industry WACC (discount rate) over the long term.
2. The WACC calculation uses the higher of Agnico-Eagle Mines'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 Agnico-Eagle Mines uses a significant proportion of equity capital.