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