LeMaitre Vascular - WACC Analysis

LeMaitre Vascular (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for LeMaitre Vascular's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of LeMaitre Vascular'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 LeMaitre Vascular uses a significant proportion of equity capital.