USNA WACC - Weighted Average Cost of Capital
The WACC of USANA Health Sciences Inc (USNA) is 8.1%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.4% | 8.25% |
| Tax rate | 34.4% - 36.8% | 35.6% |
| Cost of debt | 4.5% - 4.5% | 4.5% |
| WACC | 7.0% - 9.2% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.71 | 0.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.4% |
| Tax rate | 34.4% | 36.8% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 4.5% | 4.5% |
| After-tax WACC | 7.0% | 9.2% |
| Selected WACC | 8.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| USNA | USANA Health Sciences Inc | 0.04 | 0.91 | 0.89 |
| ELF | e.l.f. Beauty Inc | 0.06 | 1.58 | 1.52 |
| EPC | Edgewell Personal Care Co | 0.93 | 0.48 | 0.3 |
| IPAR | Inter Parfums Inc | 0.04 | 0.89 | 0.87 |
| JWEL.TO | Jamieson Wellness Inc | 0.3 | 0.58 | 0.49 |
| MTEX | Mannatech Inc | 0.2 | 0.73 | 0.65 |
| NAII | Natural Alternatives International Inc | 0.63 | -0.12 | -0.09 |
| REV | Revlon Inc | 3.53 | 1.93 | 0.59 |
| SUMR | Summer Infant Inc | 1.52 | 1.53 | 0.78 |
| VERU | Veru Inc | 0.13 | 0.47 | 0.43 |
| Low | High | |
| Unlevered beta | 0.55 | 0.7 |
| Relevered beta | 0.57 | 0.72 |
| Adjusted relevered beta | 0.71 | 0.81 |
USNA'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 USNA:
cost_of_equity (8.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.71) + 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.