Boyd Gaming Corp - WACC Analysis

Boyd Gaming Corp (Weighted Average Cost of Capital (WACC) Analysis)

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Helpful Information for Boyd Gaming Corp's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Boyd Gaming Corp'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 Boyd Gaming Corp uses a significant proportion of equity capital.