YPF Sociedad Anonima - WACC Analysis

YPF Sociedad Anonima (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for YPF Sociedad Anonima's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of YPF Sociedad Anonima'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 YPF Sociedad Anonima uses a significant proportion of equity capital.