Ascent Solar Tech - WACC Analysis

Ascent Solar Tech (Weighted Average Cost of Capital (WACC) Analysis)

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Helpful Information for Ascent Solar Tech's Analysis

What is the WACC Formula? Analyst use the WACC Discount Rate (weighted average cost of capital) to determine Ascent Solar Tech'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 Ascent Solar Tech. Value Investing Importance? This method is widely used by investment professionals to determine the correct price for investments in Ascent Solar Tech before they make value investing decisions. This WACC analysis is used in Ascent Solar Tech's discounted cash flow (DCF) valuation and see how the WACC calculation affect's Ascent Solar Tech's company valuation.

WACC Analysis Information

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

2. The WACC calculation uses the higher of Ascent Solar Tech'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 Ascent Solar Tech uses a significant proportion of equity capital.