Companhia Brasileira de Distribuicao - WACC Analysis

Companhia Brasileira de Distribuicao (Weighted Average Cost of Capital (WACC) Analysis)

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Improve your investment analysis with by seeing the Companhia Brasileira de Distribuicao's Discounted Cash Flow analysis, Companhia Brasileira de Distribuicao's Warren Buffet analysis, and Companhia Brasileira de Distribuicao's Comparable Multiple analysis.

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Helpful Information for Companhia Brasileira de Distribuicao's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Companhia Brasileira de Distribuicao'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 Companhia Brasileira de Distribuicao uses a significant proportion of equity capital.