Corus Entertainmt - WACC Analysis

Corus Entertainmt (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Corus Entertainmt's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Corus Entertainmt'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 Corus Entertainmt uses a significant proportion of equity capital.