VECO WACC - Weighted Average Cost of Capital
The WACC of Veeco Instruments Inc (VECO) is 10.5%.
| Range | Selected | |
| Cost of equity | 10.4% - 13.9% | 12.15% |
| Tax rate | 4.9% - 7.1% | 6% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 9.1% - 12.0% | 10.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.41 | 1.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.4% | 13.9% |
| Tax rate | 4.9% | 7.1% |
| Debt/Equity ratio | 0.25 | 0.25 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 9.1% | 12.0% |
| Selected WACC | 10.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VECO | Veeco Instruments Inc | 0.25 | 1.57 | 1.28 |
| ACLS | Axcelis Technologies Inc | 0.02 | 1.7 | 1.67 |
| ACMR | ACM Research Inc | 0.13 | 1.17 | 1.04 |
| ASYS | Amtech Systems Inc | 0.01 | 0.64 | 0.64 |
| ATOM | Atomera Inc | 0.01 | 1.68 | 1.66 |
| AXTI | AXT Inc | 0.93 | 1.75 | 0.94 |
| COHU | Cohu Inc | 0.02 | 1.67 | 1.64 |
| INTT | inTest Corp | 0.2 | 1.59 | 1.34 |
| NVMI | Nova Measuring Instruments Ltd | 0.03 | 1.79 | 1.74 |
| PLAB | Photronics Inc | 0.01 | 1.54 | 1.52 |
| Low | High | |
| Unlevered beta | 1.32 | 1.56 |
| Relevered beta | 1.61 | 1.93 |
| Adjusted relevered beta | 1.41 | 1.62 |
VECO'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 VECO:
cost_of_equity (12.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.41) + 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.