IPHI
Inphi Corp
Price:  
172.27 
USD
Volume:  
1,261,240.00
United States | Semiconductors & Semiconductor Equipment
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IPHI WACC - Weighted Average Cost of Capital

The WACC of Inphi Corp (IPHI) is 8.5%.

The Cost of Equity of Inphi Corp (IPHI) is 8.70%.
The Cost of Debt of Inphi Corp (IPHI) is 5.50%.

Range Selected
Cost of equity 7.40% - 10.00% 8.70%
Tax rate 8.00% - 11.70% 9.85%
Cost of debt 4.00% - 7.00% 5.50%
WACC 7.2% - 9.8% 8.5%
WACC

IPHI WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 1 1.11
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 10.00%
Tax rate 8.00% 11.70%
Debt/Equity ratio 0.05 0.05
Cost of debt 4.00% 7.00%
After-tax WACC 7.2% 9.8%
Selected WACC 8.5%

IPHI'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 IPHI:

cost_of_equity (8.70%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1) + 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.