MKSI
MKS Instruments Inc
Price:  
99.36 
USD
Volume:  
741,584.00
United States | Semiconductors & Semiconductor Equipment
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MKSI WACC - Weighted Average Cost of Capital

The WACC of MKS Instruments Inc (MKSI) is 9.1%.

The Cost of Equity of MKS Instruments Inc (MKSI) is 10.55%.
The Cost of Debt of MKS Instruments Inc (MKSI) is 8.05%.

Range Selected
Cost of equity 8.30% - 12.80% 10.55%
Tax rate 12.50% - 17.20% 14.85%
Cost of debt 7.00% - 9.10% 8.05%
WACC 7.4% - 10.7% 9.1%
WACC

MKSI WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.97 1.41
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 12.80%
Tax rate 12.50% 17.20%
Debt/Equity ratio 0.68 0.68
Cost of debt 7.00% 9.10%
After-tax WACC 7.4% 10.7%
Selected WACC 9.1%

MKSI'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 MKSI:

cost_of_equity (10.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.97) + 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.