MIME
Mimecast Ltd
Price:  
79.92 
USD
Volume:  
5,633,820
United Kingdom | Software

MIME WACC - Weighted Average Cost of Capital

The WACC of Mimecast Ltd (MIME) is 7.9%.

The Cost of Equity of Mimecast Ltd (MIME) is 7.95%.
The Cost of Debt of Mimecast Ltd (MIME) is 6.9%.

RangeSelected
Cost of equity6.9% - 9.0%7.95%
Tax rate27.0% - 27.0%27%
Cost of debt4.0% - 9.8%6.9%
WACC6.9% - 9.0%7.9%
WACC

MIME WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium4.2%5.2%
Adjusted beta0.890.92
Additional risk adjustments0.0%0.5%
Cost of equity6.9%9.0%
Tax rate27.0%27.0%
Debt/Equity ratio
0.020.02
Cost of debt4.0%9.8%
After-tax WACC6.9%9.0%
Selected WACC7.9%

MIME'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 MIME:

cost_of_equity (7.95%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.89) + 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.