Sybase - WACC Analysis

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



Helpful Information for Sybase's Analysis

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

WACC Analysis Information

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

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