Thomas Weisel - WACC Analysis

Thomas Weisel (Weighted Average Cost of Capital (WACC) Analysis)

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Helpful Information for Thomas Weisel's Analysis

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

WACC Analysis Information

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

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