IPAR WACC - Weighted Average Cost of Capital
The WACC of Inter Parfums Inc (IPAR) is 7.9%.
| Range | Selected | |
| Cost of equity | 6.8% - 9.3% | 8.05% |
| Tax rate | 24.5% - 25.7% | 25.1% |
| Cost of debt | 4.5% - 5.0% | 4.75% |
| WACC | 6.7% - 9.1% | 7.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.65 | 0.79 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 9.3% |
| Tax rate | 24.5% | 25.7% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.5% | 5.0% |
| After-tax WACC | 6.7% | 9.1% |
| Selected WACC | 7.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IPAR | Inter Parfums Inc | 0.04 | 0.89 | 0.86 |
| ELF | e.l.f. Beauty Inc | 0.06 | 1.58 | 1.51 |
| JWEL.TO | Jamieson Wellness Inc | 0.3 | 0.58 | 0.48 |
| MDVL | Medavail Holdings Inc | 1.7 | 0.76 | 0.34 |
| MTEX | Mannatech Inc | 0.2 | 0.73 | 0.64 |
| NAII | Natural Alternatives International Inc | 0.63 | -0.12 | -0.08 |
| SUMR | Summer Infant Inc | 1.52 | 1.53 | 0.71 |
| TLCC | Twinlab Consolidated Holdings Inc | 722.81 | 0.71 | 0 |
| USNA | USANA Health Sciences Inc | 0.04 | 0.91 | 0.89 |
| VERU | Veru Inc | 0.13 | 0.47 | 0.43 |
| Low | High | |
| Unlevered beta | 0.46 | 0.67 |
| Relevered beta | 0.48 | 0.69 |
| Adjusted relevered beta | 0.65 | 0.79 |
IPAR'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 IPAR:
cost_of_equity (8.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.65) + 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.