infoGROUP - WACC Analysis

infoGROUP (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for infoGROUP's Analysis

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

WACC Analysis Information

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

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