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