ICLR WACC - Weighted Average Cost of Capital
The WACC of ICON PLC (ICLR) is 8.8%.
| Range | Selected | |
| Cost of equity | 7.6% - 10.9% | 9.25% |
| Tax rate | 9.9% - 11.3% | 10.6% |
| Cost of debt | 4.9% - 11.6% | 8.25% |
| WACC | 6.9% - 10.7% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.81 | 1.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 10.9% |
| Tax rate | 9.9% | 11.3% |
| Debt/Equity ratio | 0.3 | 0.3 |
| Cost of debt | 4.9% | 11.6% |
| After-tax WACC | 6.9% | 10.7% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ICLR | ICON PLC | 0.3 | 0.69 | 0.54 |
| ADPT | Adaptive Biotechnologies Corp | 0.07 | 1.41 | 1.32 |
| ARCH.V | Arch Biopartners Inc | 0.02 | 0.72 | 0.7 |
| CDXC | Chromadex Corp | 0 | 0.57 | 0.57 |
| CDXS | Codexis Inc | 0.15 | 2 | 1.76 |
| CRL | Charles River Laboratories International Inc | 0.3 | 0.39 | 0.31 |
| EVIO | EVIO Inc | 595.18 | 0 | 0 |
| PRAH | PRA Health Sciences Inc | 0.12 | 1.31 | 1.18 |
| PSNL | Personalis Inc | 0 | 1.14 | 1.13 |
| Low | High | |
| Unlevered beta | 0.6 | 1.05 |
| Relevered beta | 0.72 | 1.1 |
| Adjusted relevered beta | 0.81 | 1.07 |
ICLR'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 ICLR:
cost_of_equity (9.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.81) + 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.