Dice Holdings - WACC Analysis

Dice Holdings (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Dice Holdings's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Dice Holdings'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 Dice Holdings uses a significant proportion of equity capital.