MNST
Monster Beverage Corp
Price:  
60.05 
USD
Volume:  
4,157,467.00
United States | Beverages
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MNST WACC - Weighted Average Cost of Capital

The WACC of Monster Beverage Corp (MNST) is 7.4%.

The Cost of Equity of Monster Beverage Corp (MNST) is 7.10%.
The Cost of Debt of Monster Beverage Corp (MNST) is 63.30%.

Range Selected
Cost of equity 6.10% - 8.10% 7.10%
Tax rate 22.60% - 23.80% 23.20%
Cost of debt 4.50% - 122.10% 63.30%
WACC 6.1% - 8.7% 7.4%
WACC

MNST WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.49 0.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.10% 8.10%
Tax rate 22.60% 23.80%
Debt/Equity ratio 0.01 0.01
Cost of debt 4.50% 122.10%
After-tax WACC 6.1% 8.7%
Selected WACC 7.4%

MNST'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 MNST:

cost_of_equity (7.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.49) + 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.