MKTX
Marketaxess Holdings Inc
Price:  
225.68 
USD
Volume:  
366,359.00
United States | Capital Markets
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MKTX WACC - Weighted Average Cost of Capital

The WACC of Marketaxess Holdings Inc (MKTX) is 6.3%.

The Cost of Equity of Marketaxess Holdings Inc (MKTX) is 9.10%.
The Cost of Debt of Marketaxess Holdings Inc (MKTX) is 4.50%.

Range Selected
Cost of equity 7.30% - 10.90% 9.10%
Tax rate 22.60% - 23.20% 22.90%
Cost of debt 4.50% - 4.50% 4.50%
WACC 5.4% - 7.2% 6.3%
WACC

MKTX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.74 1.07
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.30% 10.90%
Tax rate 22.60% 23.20%
Debt/Equity ratio 1 1
Cost of debt 4.50% 4.50%
After-tax WACC 5.4% 7.2%
Selected WACC 6.3%

MKTX'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 MKTX:

cost_of_equity (9.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.74) + 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.