IDXX
IDEXX Laboratories Inc
Price:  
473.71 
USD
Volume:  
889,616.00
United States | Health Care Equipment & Supplies
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IDXX WACC - Weighted Average Cost of Capital

The WACC of IDEXX Laboratories Inc (IDXX) is 7.0%.

The Cost of Equity of IDEXX Laboratories Inc (IDXX) is 7.05%.
The Cost of Debt of IDEXX Laboratories Inc (IDXX) is 8.85%.

Range Selected
Cost of equity 6.00% - 8.10% 7.05%
Tax rate 19.00% - 20.10% 19.55%
Cost of debt 6.10% - 11.60% 8.85%
WACC 5.9% - 8.1% 7.0%
WACC

IDXX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.46 0.57
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.00% 8.10%
Tax rate 19.00% 20.10%
Debt/Equity ratio 0.02 0.02
Cost of debt 6.10% 11.60%
After-tax WACC 5.9% 8.1%
Selected WACC 7.0%

IDXX'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 IDXX:

cost_of_equity (7.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.46) + 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.