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