Hill Intl - WACC Analysis

Hill Intl (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Hill Intl's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Hill Intl'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 Hill Intl uses a significant proportion of equity capital.