PRLB
Proto Labs Inc
Price:  
40.20 
USD
Volume:  
127,872.00
United States | Machinery
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PRLB WACC - Weighted Average Cost of Capital

The WACC of Proto Labs Inc (PRLB) is 9.7%.

The Cost of Equity of Proto Labs Inc (PRLB) is 9.75%.
The Cost of Debt of Proto Labs Inc (PRLB) is 5.55%.

Range Selected
Cost of equity 8.60% - 10.90% 9.75%
Tax rate 18.30% - 24.60% 21.45%
Cost of debt 4.50% - 6.60% 5.55%
WACC 8.6% - 10.9% 9.7%
WACC

PRLB WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.03 1.08
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.60% 10.90%
Tax rate 18.30% 24.60%
Debt/Equity ratio 0 0
Cost of debt 4.50% 6.60%
After-tax WACC 8.6% 10.9%
Selected WACC 9.7%

PRLB'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 PRLB:

cost_of_equity (9.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.03) + 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.