Amneal WACC - Weighted Average Cost of Capital
The WACC of Amneal Pharmaceuticals Inc (AMRX) is 8.3%.
| Range | Selected | |
| Cost of equity | 7.2% - 9.3% | 8.25% |
| Tax rate | 18.8% - 26.3% | 22.55% |
| Cost of debt | 6.5% - 15.6% | 11.05% |
| WACC | 6.2% - 10.4% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.73 | 0.79 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 9.3% |
| Tax rate | 18.8% | 26.3% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 6.5% | 15.6% |
| After-tax WACC | 6.2% | 10.4% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AMRX | Amneal Pharmaceuticals Inc | 1 | 0.7 | 0.39 |
| ACB.TO | Aurora Cannabis Inc | 0.33 | 1.49 | 1.18 |
| AMPH | Amphastar Pharmaceuticals Inc | 0.55 | 0.54 | 0.38 |
| ANIP | ANI Pharmaceuticals Inc | 0.44 | 0.28 | 0.21 |
| ENDP | Endo International PLC | 113.89 | 1.1 | 0.01 |
| INVA | Innoviva Inc | 0.36 | 0.34 | 0.27 |
| LCI | Lannett Company Inc | 83.32 | 0.95 | 0.01 |
| OSMT | Osmotica Pharmaceuticals PLC | 2.38 | 1.08 | 0.37 |
| PAHC | Phibro Animal Health Corp | 0.47 | 1.04 | 0.76 |
| PCRX | Pacira Biosciences Inc | 0.54 | 0.91 | 0.64 |
| Low | High | |
| Unlevered beta | 0.33 | 0.38 |
| Relevered beta | 0.6 | 0.69 |
| Adjusted relevered beta | 0.73 | 0.79 |
Amneal'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 Amneal:
cost_of_equity (8.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.73) + 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.