PACB
Pacific Biosciences of California Inc
Price:  
0.92 
USD
Volume:  
7,366,558.00
United States | Life Sciences Tools & Services
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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 11.65%.
The Cost of Debt of Pacific Biosciences of California Inc (PACB) is 7.00%.

Range Selected
Cost of equity 9.40% - 13.90% 11.65%
Tax rate 0.10% - 1.50% 0.80%
Cost of debt 7.00% - 7.00% 7.00%
WACC 7.7% - 9.0% 8.4%
WACC

PACB WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.21 1.62
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.40% 13.90%
Tax rate 0.10% 1.50%
Debt/Equity ratio 2.34 2.34
Cost of debt 7.00% 7.00%
After-tax WACC 7.7% 9.0%
Selected WACC 8.4%

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 (11.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.21) + 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.