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