XRAY WACC - Weighted Average Cost of Capital
The WACC of DENTSPLY SIRONA Inc (XRAY) is 6.3%.
| Range | Selected | |
| Cost of equity | 7.2% - 9.5% | 8.35% |
| Tax rate | 18.7% - 24.6% | 21.65% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.6% - 7.1% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.72 | 0.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 9.5% |
| Tax rate | 18.7% | 24.6% |
| Debt/Equity ratio | 0.66 | 0.66 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.6% | 7.1% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| XRAY | DENTSPLY SIRONA Inc | 0.66 | 0.44 | 0.29 |
| COO | Cooper Companies Inc | 0.17 | 0.68 | 0.6 |
| HAE | Haemonetics Corp | 0.34 | 0.81 | 0.65 |
| ICUI | ICU Medical Inc | 0.49 | 0.74 | 0.54 |
| OZSC | Ozop Energy Solutions Inc | 7.99 | 0.72 | 0.1 |
| QDEL | Quidel Corp | 1.21 | 0.86 | 0.45 |
| RVP | Retractable Technologies Inc | 0.06 | 0.5 | 0.48 |
| SIEN | Sientra Inc | 26.62 | -1.12 | -0.05 |
| VIVO | Meridian Bioscience Inc | 0.02 | 0.23 | 0.23 |
| WST | West Pharmaceutical Services Inc | 0.01 | 0.59 | 0.59 |
| Low | High | |
| Unlevered beta | 0.39 | 0.5 |
| Relevered beta | 0.58 | 0.75 |
| Adjusted relevered beta | 0.72 | 0.83 |
XRAY'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 XRAY:
cost_of_equity (8.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.72) + 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.