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