Kensey Nash - WACC Analysis

Kensey Nash (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Kensey Nash's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Kensey Nash'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 Kensey Nash uses a significant proportion of equity capital.