New York Community Bk - WACC Analysis

New York Community Bk (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for New York Community Bk's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of New York Community Bk'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 New York Community Bk uses a significant proportion of equity capital.