Techne - WACC Analysis

Techne (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Techne's Analysis

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

WACC Analysis Information

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

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