Belden CDT - WACC Analysis

Belden CDT (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Belden CDT's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Belden CDT'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 Belden CDT uses a significant proportion of equity capital.