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