PACB
Pacific Biosciences of California Inc
Price:  
1.49 
USD
Volume:  
13,259,530
United States | Life Sciences Tools & Services

PACB WACC - Weighted Average Cost of Capital

The WACC of Pacific Biosciences of California Inc (PACB) is 8.4%.

The Cost of Equity of Pacific Biosciences of California Inc (PACB) is 10.85%.
The Cost of Debt of Pacific Biosciences of California Inc (PACB) is 7%.

RangeSelected
Cost of equity9.2% - 12.5%10.85%
Tax rate0.1% - 1.5%0.8%
Cost of debt7.0% - 7.0%7%
WACC7.8% - 9.0%8.4%
WACC

PACB WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta1.161.37
Additional risk adjustments0.0%0.5%
Cost of equity9.2%12.5%
Tax rate0.1%1.5%
Debt/Equity ratio
1.671.67
Cost of debt7.0%7.0%
After-tax WACC7.8%9.0%
Selected WACC8.4%

PACB'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 PACB:

cost_of_equity (10.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.16) + 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.