Intel WACC - Weighted Average Cost of Capital
The WACC of Intel Corp (INTC) is 8.8%.
| Range | Selected | |
| Cost of equity | 9.8% - 13.0% | 11.4% |
| Tax rate | 13.4% - 38.6% | 26% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 7.6% - 10.0% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.28 | 1.45 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.8% | 13.0% |
| Tax rate | 13.4% | 38.6% |
| Debt/Equity ratio | 0.53 | 0.53 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 7.6% | 10.0% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| INTC | Intel Corp | 0.53 | 1.8 | 1.25 |
| ADI | Analog Devices Inc | 0.07 | 1.52 | 1.44 |
| AMD | Advanced Micro Devices Inc | 0.01 | 2.08 | 2.06 |
| CSIQ | Canadian Solar Inc | 8.08 | 1.38 | 0.18 |
| FSLR | First Solar Inc | 0.03 | 0.39 | 0.38 |
| IPHI | Inphi Corp | 0.05 | 0.93 | 0.89 |
| NXPI | NXP Semiconductors NV | 0.2 | 1.29 | 1.1 |
| QCOM | Qualcomm Inc | 0.09 | 1.55 | 1.45 |
| TXN | Texas Instruments Inc | 0.08 | 1.07 | 1 |
| XLNX | Xilinx Inc | 0.03 | 0.98 | 0.95 |
| Low | High | |
| Unlevered beta | 0.98 | 1.16 |
| Relevered beta | 1.42 | 1.67 |
| Adjusted relevered beta | 1.28 | 1.45 |
Intel'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 Intel:
cost_of_equity (11.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.28) + 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.