Mettler-Toledo - WACC Analysis

Mettler-Toledo (Weighted Average Cost of Capital (WACC) Analysis)

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Helpful Information for Mettler-Toledo's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Mettler-Toledo'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 Mettler-Toledo uses a significant proportion of equity capital.