The evaluation model of the WACC by Zelya consists of a precise assessment of various parameters of the Weighted Average Cost of Capital applicable to companies in the gas and electricity sector.
The Weighted Average Cost of Capital is a fundamental element of corporate finance. Financial analysts and investors systematically employ it when they seek to value and select their investments, whether it be shares or industrial projects. It thus serves as a discount rate applied to future cash flows to derive a net present value, or as a threshold value to estimate the profitability of an investment. In regulated network industries, the WACC is also subject to determination by regulators which directly affects the operators' revenues.
Zelya has developed a powerful tool for analysis and calculation of the WACC specific to the gas and electricity sectors. This tool relies on an internal database, based on observation of transactions carried out in these sectors and on quantitative analysis of market data related to a comprehensive and relevant sample of listed companies.
To differentiate analysis by activity, an operator's benchmark (beta, g) is also necessary.
Zelya Energy has established four indexes:
- the ZEG index (Zelya Energy Gas)
- the ZEP index (Zelya Energy Power)
- the ZEO index (Zelya Energy Operators)
- and the ZERP index (Zelya Energy Renewable Power)