Insight Enterprises - WACC Analysis

Insight Enterprises (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Insight Enterprises's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Insight 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 Insight Enterprises uses a significant proportion of equity capital.