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