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