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