Kilroy Realty - WACC Analysis

Kilroy Realty (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Kilroy Realty's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Kilroy Realty'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 Kilroy Realty uses a significant proportion of equity capital.