The WACC of Inotiv Inc (NOTV) is 9.8%.
| Range | Selected | |
| Cost of equity | 109.00% - 140.60% | 124.80% |
| Tax rate | 16.30% - 18.80% | 17.55% |
| Cost of debt | 7.00% - 9.90% | 8.45% |
| WACC | 8.3% - 11.2% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 22.85 | 24.24 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 109.00% | 140.60% |
| Tax rate | 16.30% | 18.80% |
| Debt/Equity ratio | 40.83 | 40.83 |
| Cost of debt | 7.00% | 9.90% |
| After-tax WACC | 8.3% | 11.2% |
| Selected WACC | 9.8% | |
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 Inotiv:
cost_of_equity (124.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (22.85) + 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.