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