Kulicke and Soffa - WACC Analysis

Kulicke and Soffa (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Kulicke and Soffa's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Kulicke and Soffa'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 Kulicke and Soffa uses a significant proportion of equity capital.