Carlisle Companies - WACC Analysis

Carlisle Companies (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Carlisle Companies's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Carlisle Companies'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 Carlisle Companies uses a significant proportion of equity capital.