Jarden Corp - WACC Analysis

Jarden Corp (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Jarden Corp's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Jarden Corp'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 Jarden Corp uses a significant proportion of equity capital.