MODN
Model N Inc
Price:  
30.00 
USD
Volume:  
1,521,680.00
United States | Software
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MODN WACC - Weighted Average Cost of Capital

The WACC of Model N Inc (MODN) is 7.6%.

The Cost of Equity of Model N Inc (MODN) is 8.15%.
The Cost of Debt of Model N Inc (MODN) is 5.50%.

Range Selected
Cost of equity 6.90% - 9.40% 8.15%
Tax rate 5.50% - 5.80% 5.65%
Cost of debt 4.00% - 7.00% 5.50%
WACC 6.3% - 8.8% 7.6%
WACC

MODN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.65 0.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 9.40%
Tax rate 5.50% 5.80%
Debt/Equity ratio 0.24 0.24
Cost of debt 4.00% 7.00%
After-tax WACC 6.3% 8.8%
Selected WACC 7.6%

MODN'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 MODN:

cost_of_equity (8.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.65) + 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.