MTD WACC - Weighted Average Cost of Capital
The WACC of Mettler-Toledo International Inc (MTD) is 7.7%.
| Range | Selected | |
| Cost of equity | 6.9% - 9.2% | 8.05% |
| Tax rate | 18.8% - 19.0% | 18.9% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.6% - 8.8% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.65 | 0.77 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 9.2% |
| Tax rate | 18.8% | 19.0% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.6% | 8.8% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MTD | Mettler-Toledo International Inc | 0.08 | 0.93 | 0.87 |
| A | Agilent Technologies Inc | 0.1 | 0.87 | 0.81 |
| ARYC | Arrayit Corp | 1428.99 | -0.44 | 0 |
| BIO | Bio Rad Laboratories Inc | 0.17 | 0.59 | 0.52 |
| CRL | Charles River Laboratories International Inc | 0.29 | 0.43 | 0.35 |
| IPA.V | Immunoprecise Antibodies Ltd | 0.02 | -0.15 | -0.15 |
| PACB | Pacific Biosciences of California Inc | 1.47 | 0.52 | 0.24 |
| PKI | PerkinElmer Inc | 0.3 | 1.21 | 0.98 |
| TECH | Bio-Techne Corp | 0.04 | 0.76 | 0.74 |
| WAT | Waters Corp | 0.08 | 0.56 | 0.53 |
| Low | High | |
| Unlevered beta | 0.45 | 0.61 |
| Relevered beta | 0.48 | 0.66 |
| Adjusted relevered beta | 0.65 | 0.77 |
MTD'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 MTD:
cost_of_equity (8.05%) = 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.