Hecla Mining - WACC Analysis

Hecla Mining (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Hecla Mining's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Hecla Mining'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 Hecla Mining uses a significant proportion of equity capital.