Increase the power and uniqueness of your financial analysis

You are a corporate or an industry analyst ?

ALGOSAVE CORPORATE VALUATION DATABASE is a tool that lets you easily gain deeper understanding of critical corporate Free Cash Flow components. It will even allow you to check how macro-economic scenarios affect each corporate WACC and BETA. Use ALGOSAVE CORPORATE VALUATION DATABASE and increase the POWER and UNIQUENESS of your cutting edge financial analysis.

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For instance, what is the WACC we – analysts – should be using to value a corporate Free Cash flow ?
Since there is a credit spread curve, do we need a WACC curve, or can we resort to using one single WACC ?

Also, we all know that – theoretically – Equity BETA should be deleveraged and re leveraged as a function of corporate financial leverage dynamics. Should we be using one-single Equity BETA to compute the cost of Equity, or do we have to build a Beta Curve ?

Lets’s examine a few examples, to better measure and understand this twin challenge.

Here are the WACC distribution (the top image) and Equity BETA distribution (the bottom picture) for 4 major and global retailers : WALMART, THE KROGER, AHOLD and CARREFOUR.

  • 1-year distribution in blue
  • 5 year distribution in red
  • 10-year distribution in green
  • First observation : WALMART is unique : a relatively narrow bandwidth both in its BETA as well as in its WACC
  • Second observation : in any case, what a world of difference between those corporates.
  • Third observation : what a world of difference between between 1-year, 5-year and 10-year WACC and BETA distribution for every corporate.
  • Final observation : even for a given year, what a broad distribution in the Equity BETA itself.

Can we answer the original question : for better issuer valuation, should we use a WACC and a BETA curve ? Probably so.

Ask for your private access to ALGOSAVE CORPORATE VALIATION DATABASE and increase the POWER and UNIQUENESS of your cutting edge financial analysis.