MDXG WACC - Weighted Average Cost of Capital
The WACC of MiMedx Group Inc (MDXG) is 10.0%.
| Range | Selected | |
| Cost of equity | 8.4% - 11.9% | 10.15% |
| Tax rate | 12.8% - 22.7% | 17.75% |
| Cost of debt | 4.5% - 4.5% | 4.5% |
| WACC | 8.3% - 11.7% | 10.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.98 | 1.25 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 11.9% |
| Tax rate | 12.8% | 22.7% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 4.5% | 4.5% |
| After-tax WACC | 8.3% | 11.7% |
| Selected WACC | 10.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MDXG | MiMedx Group Inc | 0.02 | 0.47 | 0.46 |
| AKBA | Akebia Therapeutics Inc | 0.06 | 1.43 | 1.36 |
| CDMO | Avid Bioservices Inc | 0.2 | 1.95 | 1.68 |
| EGRX | Eagle Pharmaceuticals Inc | 2.25 | -2.08 | -0.74 |
| ENTA | Enanta Pharmaceuticals Inc | 0.01 | 1.72 | 1.71 |
| ESPR | Esperion Therapeutics Inc | 1.84 | 1.73 | 0.7 |
| ICPT | Intercept Pharmaceuticals Inc | 0.42 | 0.78 | 0.58 |
| KDMN | Kadmon Holdings Inc | 0 | 1.12 | 1.12 |
| MGTX | MeiraGTx Holdings PLC | 0.19 | 1.55 | 1.35 |
| TVTX | Travere Therapeutics Inc | 0.25 | 1.93 | 1.6 |
| Low | High | |
| Unlevered beta | 0.95 | 1.35 |
| Relevered beta | 0.97 | 1.37 |
| Adjusted relevered beta | 0.98 | 1.25 |
MDXG'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 MDXG:
cost_of_equity (10.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.98) + 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.