Barr Pharma (Weighted Average Cost of Capital (WACC) Analysis)
Improve your investment analysis with by seeing the Barr Pharma's Discounted Cash Flow analysis, Barr Pharma's Warren Buffet analysis, and Barr Pharma's Comparable Multiple analysis. Helpful Information for Barr Pharma's AnalysisWhat is the WACC Formula? Analyst use the WACC Discount Rate (weighted average cost of capital) to determine Barr Pharma'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 Barr Pharma. Value Investing Importance? This method is widely used by investment professionals to determine the correct price for investments in Barr Pharma before they make value investing decisions. This WACC analysis is used in Barr Pharma's discounted cash flow (DCF) valuation and see how the WACC calculation affect's Barr Pharma's company valuation. |
WACC Analysis Information1. The WACC (discount rate) calculation for Barr Pharma uses comparable companies to produce a single WACC (discount rate). An industry average WACC (discount rate) is the most accurate for Barr Pharma over the long term. If there are any short-term differences between the industry WACC and Barr Pharma's WACC (discount rate), then Barr Pharma is more likely to revert to the industry WACC (discount rate) over the long term. 2. The WACC calculation uses the higher of Barr Pharma'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 Barr Pharma uses a significant proportion of equity capital. |