St. Mary Land - WACC Analysis

St. Mary Land (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for St. Mary Land's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of St. Mary Land'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 St. Mary Land uses a significant proportion of equity capital.