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