EXAS WACC - Weighted Average Cost of Capital
The WACC of Exact Sciences Corp (EXAS) is 8.6%.
| Range | Selected | |
| Cost of equity | 8.4% - 10.6% | 9.5% |
| Tax rate | 1.0% - 1.3% | 1.15% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 7.4% - 9.8% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.98 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 10.6% |
| Tax rate | 1.0% | 1.3% |
| Debt/Equity ratio | 0.27 | 0.27 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 7.4% | 9.8% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EXAS | Exact Sciences Corp | 0.27 | 0.17 | 0.13 |
| BBIO | BridgeBio Pharma Inc | 0.3 | 1.02 | 0.79 |
| BCRX | BioCryst Pharmaceuticals Inc | 0.45 | 1.05 | 0.73 |
| BMRN | Biomarin Pharmaceutical Inc | 0.05 | 0.56 | 0.53 |
| INSM | Insmed Inc | 0.09 | 0.87 | 0.8 |
| MYGN | Myriad Genetics Inc | 0.06 | 0.9 | 0.85 |
| NTRA | Natera Inc | 0 | 1.12 | 1.12 |
| NVAX | Novavax Inc | 0.22 | 1.74 | 1.43 |
| OPK | OPKO Health Inc | 0.48 | 0.15 | 0.1 |
| PTCT | PTC Therapeutics Inc | 0.61 | 1.58 | 0.99 |
| Low | High | |
| Unlevered beta | 0.76 | 0.82 |
| Relevered beta | 0.97 | 1.03 |
| Adjusted relevered beta | 0.98 | 1.02 |
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 (9.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.98) + 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.