IPAR
Inter Parfums Inc
Price:  
131.91 
USD
Volume:  
326,665.00
United States | Personal Products
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IPAR WACC - Weighted Average Cost of Capital

The WACC of Inter Parfums Inc (IPAR) is 8.1%.

The Cost of Equity of Inter Parfums Inc (IPAR) is 8.25%.
The Cost of Debt of Inter Parfums Inc (IPAR) is 4.75%.

Range Selected
Cost of equity 7.20% - 9.30% 8.25%
Tax rate 24.50% - 25.70% 25.10%
Cost of debt 4.50% - 5.00% 4.75%
WACC 7.1% - 9.1% 8.1%
WACC

IPAR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.72 0.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.20% 9.30%
Tax rate 24.50% 25.70%
Debt/Equity ratio 0.04 0.04
Cost of debt 4.50% 5.00%
After-tax WACC 7.1% 9.1%
Selected WACC 8.1%

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 (8.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.72) + 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.