DHR
Danaher Corp
Price:  
190.05 
USD
Volume:  
3,819,746.00
United States | Health Care Equipment & Supplies
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Danaher WACC - Weighted Average Cost of Capital

The WACC of Danaher Corp (DHR) is 8.3%.

The Cost of Equity of Danaher Corp (DHR) is 8.90%.
The Cost of Debt of Danaher Corp (DHR) is 4.25%.

Range Selected
Cost of equity 7.40% - 10.40% 8.90%
Tax rate 16.20% - 16.30% 16.25%
Cost of debt 4.00% - 4.50% 4.25%
WACC 7.0% - 9.7% 8.3%
WACC

Danaher WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.76 0.99
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 10.40%
Tax rate 16.20% 16.30%
Debt/Equity ratio 0.11 0.11
Cost of debt 4.00% 4.50%
After-tax WACC 7.0% 9.7%
Selected WACC 8.3%

Danaher'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 Danaher:

cost_of_equity (8.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.76) + 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.