America Movil - WACC Analysis

America Movil (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for America Movil's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of America Movil'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 America Movil uses a significant proportion of equity capital.