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