VIVO WACC - Weighted Average Cost of Capital
The WACC of Meridian Bioscience Inc (VIVO) is 9.0%.
| Range | Selected | |
| Cost of equity | 7.4% - 10.9% | 9.15% |
| Tax rate | 22.0% - 22.4% | 22.2% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 7.3% - 10.8% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.76 | 1.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.4% | 10.9% |
| Tax rate | 22.0% | 22.4% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 7.3% | 10.8% |
| Selected WACC | 9.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VIVO | Meridian Bioscience Inc | 0.02 | 0.23 | 0.23 |
| ATRS | Antares Pharma Inc | 0.02 | 1.15 | 1.13 |
| BLFS | BioLife Solutions Inc | 0.02 | 1.48 | 1.46 |
| CERS | Cerus Corp | 0.32 | 1.89 | 1.51 |
| KIDS | OrthoPediatrics Corp | 0.13 | 0.67 | 0.61 |
| LNTH | Lantheus Holdings Inc | 0.12 | 0.63 | 0.58 |
| OSUR | OraSure Technologies Inc | 0 | 0.65 | 0.65 |
| SENS | Senseonics Holdings Inc | 0.12 | 1.62 | 1.49 |
| SIBN | SI-BONE Inc | 0.05 | 1.13 | 1.08 |
| SIEN | Sientra Inc | 26.62 | -1.12 | -0.05 |
| Low | High | |
| Unlevered beta | 0.63 | 1.1 |
| Relevered beta | 0.64 | 1.12 |
| Adjusted relevered beta | 0.76 | 1.08 |
VIVO'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 VIVO:
cost_of_equity (9.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.76) + 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.