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