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Prestige Consumer Healthcare WACC %

:4.75% As of Today
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As of today (2021-09-25), Prestige Consumer Healthcare's weighted average cost of capital is 4.75%. Prestige Consumer Healthcare's ROIC % is 7.54% (calculated using TTM income statement data). Prestige Consumer Healthcare generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


Prestige Consumer Healthcare WACC % Historical Data

The historical data trend for Prestige Consumer Healthcare's WACC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Prestige Consumer Healthcare Annual Data
Trend Mar12 Mar13 Mar14 Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21
WACC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.16 6.88 6.53 4.49 4.83

Prestige Consumer Healthcare Quarterly Data
Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21
WACC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.56 4.26 4.50 4.83 4.49

Competitive Comparison

For the Medical Distribution subindustry, Prestige Consumer Healthcare's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Prestige Consumer Healthcare WACC % Distribution

For the Medical Distribution industry and Healthcare sector, Prestige Consumer Healthcare's WACC % distribution charts can be found below:

* The bar in red indicates where Prestige Consumer Healthcare's WACC % falls into.



Prestige Consumer Healthcare WACC % Calculation

The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.

WACC=E/(E + D)*Cost of Equity+D/(E + D)*Cost of Debt*(1 - Tax Rate)

1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Prestige Consumer Healthcare's market capitalization (E) is $2796.351 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Jun. 2021, Prestige Consumer Healthcare's latest two-year average Short-Term Debt & Capital Lease Obligation was $7.639 Mil and its latest two-year average Long-Term Debt & Capital Lease Obligation was $1632.989 Mil. The total Book Value of Debt (D) is $1640.628 Mil.
a) weight of equity = E / (E + D) = 2796.351 / (2796.351 + 1640.628) = 0.6302
b) weight of debt = D / (E + D) = 1640.628 / (2796.351 + 1640.628) = 0.3698

2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 1.47000000%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Prestige Consumer Healthcare's beta is 0.63.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 1.47000000% + 0.63 * 6% = 5.25%

3. Cost of Debt:
GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.
As of Mar. 2021, Prestige Consumer Healthcare's interest expense (positive number) was $82.328 Mil. Its total Book Value of Debt (D) is $1640.628 Mil.
Cost of Debt = 82.328 / 1640.628 = 5.0181%.

4. Multiply by one minus Average Tax Rate:
GuruFocus uses the latest two-year average tax rate to do the calculation.
The latest Two-year Average Tax Rate is 22.445%.

Prestige Consumer Healthcare's Weighted Average Cost Of Capital (WACC) for Today is calculated as:

WACC=E / (E + D)*Cost of Equity+D / (E + D)*Cost of Debt*(1 - Tax Rate)
=0.6302*5.25%+0.3698*5.0181%*(1 - 22.445%)
=4.75%

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Prestige Consumer Healthcare  (NYSE:PBH) WACC % Explanation

Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Prestige Consumer Healthcare's weighted average cost of capital is 4.75%. Prestige Consumer Healthcare's ROIC % is 7.54% (calculated using TTM income statement data). Prestige Consumer Healthcare generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


Be Aware

1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.

2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.

3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.

4. GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.


Related Terms

Prestige Consumer Healthcare Business Description

Prestige Consumer Healthcare logo
Industry
Healthcare » Medical Distribution NAICS : 325412 SIC : 2834
Traded in Other Exchanges
Address
660 White Plains Road, Tarrytown, NY, USA, 10591
Prestige Consumer Healthcare is an American company that distributes branded over-the-counter healthcare and household cleaning products to mass merchandisers, drugstores, convenience stores, supermarkets, and e-commerce channels. The firm's major brands include BC/Goody's, Chloraseptic, Clear Eyes, Compound W, Debrox, Dramamine, Fess, Fleet, Gaviscon, Hydralyte, Monistat, Nix, and Summer's Eve. The company's portfolio includes branded products in women's health, gastrointestinal, analgesics, eye and ear care, dermatological products, oral care, skincare, sleep aids, and cough and cold. Prestige has customers in the United States, Canada, and Australia.
Executives
Ricciardi Natale S director C/O MORRIS COMMUNICATIONS CORP 725 BROAD ST. AUGUSTA GA 30903
Costley Gary E director 660 WHITE PLAINS RD., SUITE 205 TARRYTOWN NY 10591
Coughlin Christopher J director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: COUGHLIN CHRISTOPHER J a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Jenness James M director PO BOX 3599 BATTLECREEK MI 49016-3599
Zier Dawn M. director 600 OFFICE CENTER DRIVE FORT WASHINGTON PA 19034
Byom John E director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: BYOM JOHN E a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Hopkins Sheila director C/O WARNACO INC 90 PARK AVENUE NEW YORK NY 10016
Lombardi Ronald M. officer: Chief Executive Officer 660 WHITE PLAINS RD. TARRYTOWN NY 10591
Fritz Mary Beth officer: Senior VP Quality & Regulatory 660 WHITE PLAINS RD 2ND FL TARRYTOWN NY 10591
Sacco Christine officer: Chief Financial Officer C/O SMART BALANCE, INC. 115 WEST CENTURY ROAD, SUITE 260 PARAMUS NJ 07652
Zerillo Jeffrey officer: Senior VP Operations 660 WHITE PLAINS RD 2ND FL TARRYTOWN NY 10591
Mekhail Adel other: EVP, Marketing & Sales 660 WHITE PLAINS RD., 2ND FL TARRYTOWN NY 10591
Connors Timothy officer: EVP, Sales & Marketing 660 WHITE PLAINS RD., SUITE 205 TARRYTOWN NY 10591
Johnson Carl J director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: JOHNSON CARL J a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Boyko Jean A officer: SVP, Science and Technology 660 WHITE PLAINS RD., SUITE 205 TARRYTOWN NY 10591

Prestige Consumer Healthcare Headlines

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