EXAS WACC - Weighted Average Cost of Capital
The WACC of Exact Sciences Corp (EXAS) is 8.3%.
| Range | Selected | |
| Cost of equity | 7.5% - 10.5% | 9% |
| Tax rate | 1.0% - 1.3% | 1.15% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 6.8% - 9.8% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.79 | 1.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.5% | 10.5% |
| Tax rate | 1.0% | 1.3% |
| Debt/Equity ratio | 0.26 | 0.26 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 6.8% | 9.8% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EXAS | Exact Sciences Corp | 0.26 | 0.47 | 0.37 |
| BBIO | BridgeBio Pharma Inc | 0.26 | 0.98 | 0.78 |
| BCRX | BioCryst Pharmaceuticals Inc | 0.43 | 0.85 | 0.6 |
| BMRN | Biomarin Pharmaceutical Inc | 0.06 | 0.51 | 0.48 |
| NTRA | Natera Inc | 0 | 0.97 | 0.97 |
| NVAX | Novavax Inc | 0.22 | 1.09 | 0.9 |
| OPK | OPKO Health Inc | 0.42 | 0.37 | 0.26 |
| PTCT | PTC Therapeutics Inc | 0.6 | 1.54 | 0.96 |
| SRNE | Sorrento Therapeutics Inc | 30.58 | -0.44 | -0.01 |
| VCEL | Vericel Corp | 0 | 0.87 | 0.87 |
| Low | High | |
| Unlevered beta | 0.55 | 0.81 |
| Relevered beta | 0.69 | 1.01 |
| Adjusted relevered beta | 0.79 | 1.01 |
EXAS'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 EXAS:
cost_of_equity (9.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.79) + 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.