Jumu Enterprise

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

Improve your investment analysis with by seeing the 's Discounted Cash Flow analysis, 's Warren Buffet analysis, and 's Comparable Multiple analysis.

## Helpful Information for 's Analysis

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

## WACC Analysis Information

1. The WACC (discount rate) calculation for [http://www.wikiwealth.com/research:jumu-enterprise ] uses comparable companies to produce a single WACC (discount rate). An industry average WACC (discount rate) is the most accurate for [http://www.wikiwealth.com/research:jumu-enterprise ] over the long term. If there are any short-term differences between the industry WACC and [http://www.wikiwealth.com/research:jumu-enterprise ]'s WACC (discount rate), then [http://www.wikiwealth.com/research:jumu-enterprise ] is more likely to revert to the industry WACC (discount rate) over the long term.

2. The WACC calculation uses the higher of [http://www.wikiwealth.com/research:jumu-enterprise ]'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 [http://www.wikiwealth.com/research:jumu-enterprise ] uses a significant proportion of equity capital.