Luminex WACC - Weighted Average Cost of Capital
The WACC of Luminex Corp (LMNX) is 7.6%.
| Range | Selected | |
| Cost of equity | 6.8% - 9.5% | 8.15% |
| Tax rate | 23.0% - 36.9% | 29.95% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.4% - 8.8% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.86 | 1.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 9.5% |
| Tax rate | 23.0% | 36.9% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.4% | 8.8% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LMNX | Luminex Corp | 0.12 | 0.57 | 0.52 |
| ARYC | Arrayit Corp | 1428.99 | -1 | 0 |
| BLI | Berkeley Lights Inc | 0.42 | 0.99 | 0.77 |
| FLDM | Fluidigm Corp | 0.25 | 1.16 | 0.99 |
| HBIO | Harvard Bioscience Inc | 2.65 | 1.92 | 0.67 |
| INIS | International Isotopes Inc | 0.27 | 0.42 | 0.35 |
| IPA.V | Immunoprecise Antibodies Ltd | 0.02 | -0.15 | -0.15 |
| MRVI | Maravai LifeSciences Holdings Inc | 0.65 | 1.16 | 0.79 |
| NSTG | NanoString Technologies Inc | 44.72 | 3.87 | 0.12 |
| PACB | Pacific Biosciences of California Inc | 1.93 | 0.41 | 0.17 |
| Low | High | |
| Unlevered beta | 0.28 | 0.58 |
| Relevered beta | 0.79 | 1.01 |
| Adjusted relevered beta | 0.86 | 1.01 |
Luminex'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 Luminex:
cost_of_equity (8.15%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.86) + 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.