MMSI
Merit Medical Systems Inc
Price:  
93.49 
USD
Volume:  
448,468
United States | Health Care Equipment & Supplies

MMSI WACC - Weighted Average Cost of Capital

The WACC of Merit Medical Systems Inc (MMSI) is 7.8%.

The Cost of Equity of Merit Medical Systems Inc (MMSI) is 8.3%.
The Cost of Debt of Merit Medical Systems Inc (MMSI) is 4.55%.

RangeSelected
Cost of equity7.3% - 9.3%8.3%
Tax rate13.5% - 17.4%15.45%
Cost of debt4.0% - 5.1%4.55%
WACC6.8% - 8.7%7.8%
WACC

MMSI WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.740.79
Additional risk adjustments0.0%0.5%
Cost of equity7.3%9.3%
Tax rate13.5%17.4%
Debt/Equity ratio
0.130.13
Cost of debt4.0%5.1%
After-tax WACC6.8%8.7%
Selected WACC7.8%

MMSI'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 MMSI:

cost_of_equity (8.30%) = 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.