TriQuint Semi - WACC Analysis

TriQuint Semi (Weighted Average Cost of Capital (WACC) Analysis)



Helpful Information for TriQuint Semi's Analysis

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

WACC Analysis Information

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

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