Advanced Energy Inds (Weighted Average Cost of Capital (WACC) Analysis)
 Improve your investment analysis with by seeing the Advanced Energy Inds's Discounted Cash Flow analysis, Advanced Energy Inds's Warren Buffet analysis, and Advanced Energy Inds's Comparable Multiple analysis.  Helpful Information for Advanced Energy Inds's AnalysisWhat is the WACC Formula? Analyst use the WACC Discount Rate (weighted average cost of capital) to determine Advanced Energy Inds'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 Advanced Energy Inds. Value Investing Importance? This method is widely used by investment professionals to determine the correct price for investments in Advanced Energy Inds before they make value investing decisions. This WACC analysis is used in Advanced Energy Inds's discounted cash flow (DCF) valuation and see how the WACC calculation affect's Advanced Energy Inds's company valuation. |
WACC Analysis Information1. The WACC (discount rate) calculation for Advanced Energy Inds uses comparable companies to produce a single WACC (discount rate). An industry average WACC (discount rate) is the most accurate for Advanced Energy Inds over the long term. If there are any short-term differences between the industry WACC and Advanced Energy Inds's WACC (discount rate), then Advanced Energy Inds is more likely to revert to the industry WACC (discount rate) over the long term. 2. The WACC calculation uses the higher of Advanced Energy Inds'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 Advanced Energy Inds uses a significant proportion of equity capital. |
