AMGN
Amgen Inc
Price:  
281.22 
USD
Volume:  
4,536,694.00
United States | Biotechnology
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Amgen WACC - Weighted Average Cost of Capital

The WACC of Amgen Inc (AMGN) is 8.4%.

The Cost of Equity of Amgen Inc (AMGN) is 9.55%.
The Cost of Debt of Amgen Inc (AMGN) is 6.05%.

Range Selected
Cost of equity 8.10% - 11.00% 9.55%
Tax rate 11.10% - 11.60% 11.35%
Cost of debt 4.60% - 7.50% 6.05%
WACC 7.0% - 9.8% 8.4%
WACC

Amgen WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.93 1.1
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.10% 11.00%
Tax rate 11.10% 11.60%
Debt/Equity ratio 0.4 0.4
Cost of debt 4.60% 7.50%
After-tax WACC 7.0% 9.8%
Selected WACC 8.4%

Amgen's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for Amgen:

cost_of_equity (9.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.93) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.