CMD WACC - Weighted Average Cost of Capital
The WACC of Cantel Medical Corp (CMD) is 7.6%.
| Range | Selected | |
| Cost of equity | 7.6% - 9.9% | 8.75% |
| Tax rate | 31.6% - 34.2% | 32.9% |
| Cost of debt | 4.9% - 6.5% | 5.7% |
| WACC | 6.6% - 8.6% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.05 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 9.9% |
| Tax rate | 31.6% | 34.2% |
| Debt/Equity ratio | 0.31 | 0.31 |
| Cost of debt | 4.9% | 6.5% |
| After-tax WACC | 6.6% | 8.6% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CMD | Cantel Medical Corp | 0.31 | 1.55 | 1.28 |
| CNMD | Conmed Corp | 0.56 | 0.46 | 0.33 |
| IART | Integra Lifesciences Holdings Corp | 1.89 | 1.51 | 0.67 |
| ITGR | Integer Holdings Corp | 0.24 | 0.69 | 0.59 |
| IVC | Invacare Corp | 354.95 | 0.24 | 0 |
| LIVN | LivaNova PLC | 0.25 | 0.65 | 0.56 |
| NUVA | NuVasive Inc | 0.43 | 0.94 | 0.73 |
| NVRO | Nevro Corp | 1.02 | 1.56 | 0.93 |
| TNDM | Tandem Diabetes Care Inc | 0.28 | 1.33 | 1.12 |
| VREX | Varex Imaging Corp | 1.26 | 2.14 | 1.16 |
| Low | High | |
| Unlevered beta | 0.64 | 0.81 |
| Relevered beta | 1.07 | 1.13 |
| Adjusted relevered beta | 1.05 | 1.09 |
CMD'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 CMD:
cost_of_equity (8.75%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.05) + 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.