Qiao Xing Mobile - WACC Analysis

Qiao Xing Mobile (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Qiao Xing Mobile's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Qiao Xing Mobile'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 Qiao Xing Mobile uses a significant proportion of equity capital.