BIO WACC - Weighted Average Cost of Capital
The WACC of Bio Rad Laboratories Inc (BIO) is 8.0%.
| Range | Selected | |
| Cost of equity | 7.5% - 9.8% | 8.65% |
| Tax rate | 22.2% - 22.6% | 22.4% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 6.8% - 9.1% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.8 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.5% | 9.8% |
| Tax rate | 22.2% | 22.6% |
| Debt/Equity ratio | 0.19 | 0.19 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 6.8% | 9.1% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BIO | Bio Rad Laboratories Inc | 0.19 | 0.59 | 0.51 |
| BRKR | Bruker Corp | 0.38 | 0.95 | 0.74 |
| MRVI | Maravai LifeSciences Holdings Inc | 0.57 | 0.98 | 0.68 |
| MTD | Mettler-Toledo International Inc | 0.08 | 0.9 | 0.85 |
| PACB | Pacific Biosciences of California Inc | 2.24 | 0.3 | 0.11 |
| PKI | PerkinElmer Inc | 0.3 | 1.21 | 0.98 |
| QGEN | Qiagen NV | 0.14 | 0.55 | 0.49 |
| RGEN | Repligen Corp | 0.08 | 0.77 | 0.72 |
| TECH | Bio-Techne Corp | 0.04 | 0.72 | 0.7 |
| WAT | Waters Corp | 0.08 | 0.54 | 0.51 |
| Low | High | |
| Unlevered beta | 0.61 | 0.71 |
| Relevered beta | 0.7 | 0.81 |
| Adjusted relevered beta | 0.8 | 0.87 |
BIO'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 BIO:
cost_of_equity (8.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.8) + 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.