PETQ
PetIQ Inc
Price:  
30.98 
USD
Volume:  
933,884.00
United States | Health Care Providers & Services
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PETQ WACC - Weighted Average Cost of Capital

The WACC of PetIQ Inc (PETQ) is 6.1%.

The Cost of Equity of PetIQ Inc (PETQ) is 6.35%.
The Cost of Debt of PetIQ Inc (PETQ) is 6.75%.

Range Selected
Cost of equity 5.50% - 7.20% 6.35%
Tax rate 14.20% - 23.70% 18.95%
Cost of debt 6.00% - 7.50% 6.75%
WACC 5.4% - 6.7% 6.1%
WACC

PETQ WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.36 0.43
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.50% 7.20%
Tax rate 14.20% 23.70%
Debt/Equity ratio 0.48 0.48
Cost of debt 6.00% 7.50%
After-tax WACC 5.4% 6.7%
Selected WACC 6.1%

PETQ'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 PETQ:

cost_of_equity (6.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + 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.