Caliper Life Sciences - WACC Analysis

Caliper Life Sciences (Weighted Average Cost of Capital (WACC) Analysis)

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Helpful Information for Caliper Life Sciences's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Caliper Life Sciences'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 Caliper Life Sciences uses a significant proportion of equity capital.