SKIN
Beauty Health Co
Price:  
2.08 
USD
Volume:  
516,676.00
United States | N/A
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SKIN WACC - Weighted Average Cost of Capital

The WACC of Beauty Health Co (SKIN) is 7.5%.

The Cost of Equity of Beauty Health Co (SKIN) is 12.95%.
The Cost of Debt of Beauty Health Co (SKIN) is 5.00%.

Range Selected
Cost of equity 10.10% - 15.80% 12.95%
Tax rate 1.50% - 1.60% 1.55%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.6% - 8.4% 7.5%
WACC

SKIN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.36 1.96
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.10% 15.80%
Tax rate 1.50% 1.60%
Debt/Equity ratio 2.09 2.09
Cost of debt 5.00% 5.00%
After-tax WACC 6.6% 8.4%
Selected WACC 7.5%

SKIN'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 SKIN:

cost_of_equity (12.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.36) + 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.