ASM Intl - WACC Analysis

ASM Intl (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for ASM Intl's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of ASM Intl'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 ASM Intl uses a significant proportion of equity capital.