RMD
Resmed Inc
Price:  
249.34 
USD
Volume:  
427,411.00
United States | Health Care Equipment & Supplies
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Resmed WACC - Weighted Average Cost of Capital

The WACC of Resmed Inc (RMD) is 8.3%.

The Cost of Equity of Resmed Inc (RMD) is 8.40%.
The Cost of Debt of Resmed Inc (RMD) is 4.25%.

Range Selected
Cost of equity 7.00% - 9.80% 8.40%
Tax rate 18.70% - 19.00% 18.85%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.9% - 9.7% 8.3%
WACC

Resmed WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.69 0.88
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.00% 9.80%
Tax rate 18.70% 19.00%
Debt/Equity ratio 0.02 0.02
Cost of debt 4.00% 4.50%
After-tax WACC 6.9% 9.7%
Selected WACC 8.3%

Resmed'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 Resmed:

cost_of_equity (8.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.69) + 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.