EW Scripps - WACC Analysis

EW Scripps (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for EW Scripps's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of EW Scripps'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 EW Scripps uses a significant proportion of equity capital.