BHE
Benchmark Electronics Inc
Price:  
39.96 
USD
Volume:  
201,227.00
United States | Electronic Equipment, Instruments & Components
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BHE WACC - Weighted Average Cost of Capital

The WACC of Benchmark Electronics Inc (BHE) is 8.2%.

The Cost of Equity of Benchmark Electronics Inc (BHE) is 8.70%.
The Cost of Debt of Benchmark Electronics Inc (BHE) is 6.90%.

Range Selected
Cost of equity 6.70% - 10.70% 8.70%
Tax rate 20.10% - 21.00% 20.55%
Cost of debt 5.60% - 8.20% 6.90%
WACC 6.4% - 10.1% 8.2%
WACC

BHE WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.62 1.04
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.70% 10.70%
Tax rate 20.10% 21.00%
Debt/Equity ratio 0.18 0.18
Cost of debt 5.60% 8.20%
After-tax WACC 6.4% 10.1%
Selected WACC 8.2%

BHE'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 BHE:

cost_of_equity (8.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.62) + 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.