BIIB
Biogen Inc
Price:  
123.53 
USD
Volume:  
1,460,037.00
United States | Biotechnology
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Biogen WACC - Weighted Average Cost of Capital

The WACC of Biogen Inc (BIIB) is 8.0%.

The Cost of Equity of Biogen Inc (BIIB) is 9.50%.
The Cost of Debt of Biogen Inc (BIIB) is 4.30%.

Range Selected
Cost of equity 7.90% - 11.10% 9.50%
Tax rate 12.80% - 15.70% 14.25%
Cost of debt 4.00% - 4.60% 4.30%
WACC 6.8% - 9.2% 8.0%
WACC

Biogen WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.88 1.11
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.90% 11.10%
Tax rate 12.80% 15.70%
Debt/Equity ratio 0.35 0.35
Cost of debt 4.00% 4.60%
After-tax WACC 6.8% 9.2%
Selected WACC 8.0%

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 (9.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.88) + 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.