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