NBT Bancorp (Weighted Average Cost of Capital (WACC) Analysis)
 Improve your investment analysis with by seeing the NBT Bancorp's Discounted Cash Flow analysis, NBT Bancorp's Warren Buffet analysis, and NBT Bancorp's Comparable Multiple analysis.  Helpful Information for NBT Bancorp's AnalysisWhat is the WACC Formula? Analyst use the WACC Discount Rate (weighted average cost of capital) to determine NBT Bancorp'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 NBT Bancorp. Value Investing Importance? This method is widely used by investment professionals to determine the correct price for investments in NBT Bancorp before they make value investing decisions. This WACC analysis is used in NBT Bancorp's discounted cash flow (DCF) valuation and see how the WACC calculation affect's NBT Bancorp's company valuation. |
WACC Analysis Information1. The WACC (discount rate) calculation for NBT Bancorp uses comparable companies to produce a single WACC (discount rate). An industry average WACC (discount rate) is the most accurate for NBT Bancorp over the long term. If there are any short-term differences between the industry WACC and NBT Bancorp's WACC (discount rate), then NBT Bancorp is more likely to revert to the industry WACC (discount rate) over the long term. 2. The WACC calculation uses the higher of NBT Bancorp'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 NBT Bancorp uses a significant proportion of equity capital. |
