DOCS WACC - Weighted Average Cost of Capital
The WACC of Doximity Inc (DOCS) is 6.6%.
| Range | Selected | |
| Cost of equity | 8.1% - 10.4% | 9.25% |
| Tax rate | 18.3% - 22.7% | 20.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.1% - 7.1% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.92 | 0.99 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 10.4% |
| Tax rate | 18.3% | 22.7% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.1% | 7.1% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DOCS | Doximity Inc | 1.02 | 1.69 | 0.93 |
| CERN | Cerner Corp | 0.07 | 0.76 | 0.72 |
| CHNG | Change Healthcare Inc | 0.51 | 0.92 | 0.65 |
| GDRX | Goodrx Holdings Inc | 0.35 | 0.72 | 0.57 |
| INOV | Inovalon Holdings Inc | 0.14 | 0.51 | 0.46 |
| MPLN | Multiplan Corp | 12.06 | 2.05 | 0.19 |
| OMCL | Omnicell Inc | 0.26 | 0.02 | 0.02 |
| TDOC | Teladoc Health Inc | 1.17 | 1.02 | 0.53 |
| Low | High | |
| Unlevered beta | 0.51 | 0.58 |
| Relevered beta | 0.88 | 0.99 |
| Adjusted relevered beta | 0.92 | 0.99 |
DOCS'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 DOCS:
cost_of_equity (9.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.92) + 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.