BIIB
Biogen Inc
Price:  
133.19 
USD
Volume:  
1,474,219
United States | Biotechnology

Biogen WACC - Weighted Average Cost of Capital

The WACC of Biogen Inc (BIIB) is 7.9%.

The Cost of Equity of Biogen Inc (BIIB) is 9.25%.
The Cost of Debt of Biogen Inc (BIIB) is 4.3%.

RangeSelected
Cost of equity7.7% - 10.8%9.25%
Tax rate12.8% - 15.7%14.25%
Cost of debt4.0% - 4.6%4.3%
WACC6.7% - 9.0%7.9%
WACC

Biogen WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.841.06
Additional risk adjustments0.0%0.5%
Cost of equity7.7%10.8%
Tax rate12.8%15.7%
Debt/Equity ratio
0.340.34
Cost of debt4.0%4.6%
After-tax WACC6.7%9.0%
Selected WACC7.9%

Biogen'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 Biogen:

cost_of_equity (9.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.84) + 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.