Question 1

What is Diamondback Energy, Inc.'s WACC?

Accepted Answer

Diamondback Energy, Inc. (FANG) has a Weighted Average Cost of Capital (WACC) of 6.92%. This is calculated using a Cost of Equity of 8.25% (via CAPM with a beta of 0.84) and a pre-tax Cost of Debt of 2.00%, with an equity weight of 80.11% in the capital structure.

Question 2

Is Diamondback Energy, Inc.'s WACC high or low?

Accepted Answer

Diamondback Energy, Inc.'s WACC of 6.92% is below the typical range of 8-12% for most companies, indicating relatively low cost of capital and lower risk. WACC is used as the discount rate in DCF valuations — a lower WACC results in higher present values of future cash flows.

Question 3

How is Diamondback Energy, Inc.'s WACC calculated?

Accepted Answer

Diamondback Energy, Inc.'s WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 8.25% is derived from the CAPM model using a beta of 0.84. The pre-tax Cost of Debt (Rd) is 2.00%. The capital structure is 80.11% equity and 19.89% debt.

Diamondback Energy, Inc. (FANG) — WACC 分析

WACC 构成

解读

Diamondback Energy, Inc.（FANG）WACC：6.92%

WACC计算器

Diamondback Energy, Inc.（FANG） WACC 解读

FANG 公司分析

FANG DCF 估值

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