WNS Limited - WACC Analysis

WNS Limited (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for WNS Limited's Analysis

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

WACC Analysis Information

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

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