Integra LifeSciences - WACC Analysis

Integra LifeSciences (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for Integra LifeSciences's Analysis

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

WACC Analysis Information

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

2. The WACC calculation uses the higher of Integra LifeSciences'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 Integra LifeSciences uses a significant proportion of equity capital.