CERT
Certara Inc
Price:  
12.99 
USD
Volume:  
2,963,026.00
United States | Health Care Technology
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

Certara WACC - Weighted Average Cost of Capital

The WACC of Certara Inc (CERT) is 6.6%.

The Cost of Equity of Certara Inc (CERT) is 6.75%.
The Cost of Debt of Certara Inc (CERT) is 6.60%.

Range Selected
Cost of equity 5.40% - 8.10% 6.75%
Tax rate 13.40% - 24.70% 19.05%
Cost of debt 6.20% - 7.00% 6.60%
WACC 5.4% - 7.8% 6.6%
WACC

Certara WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.34 0.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 8.10%
Tax rate 13.40% 24.70%
Debt/Equity ratio 0.14 0.14
Cost of debt 6.20% 7.00%
After-tax WACC 5.4% 7.8%
Selected WACC 6.6%

Certara'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 Certara:

cost_of_equity (6.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.34) + 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.