AHC.TO WACC - Weighted Average Cost of Capital

The WACC of Apollo Healthcare Corp (AHC.TO) is 9.0%.

The Cost of Equity of Apollo Healthcare Corp (AHC.TO) is 9.30%.

The Cost of Debt of Apollo Healthcare Corp (AHC.TO) is 4.25%.

	Range	Selected
Cost of equity	8.20% - 10.40%	9.30%
Tax rate	26.50% - 26.50%	26.50%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.9% - 10.1%	9.0%

WACC

AHC.TO WACC calculation

Category	Low	High

Long-term bond rate	3.4%	3.9%
Equity market risk premium	4.7%	5.7%
Adjusted beta	1.02	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.20%	10.40%

Tax rate	26.50%	26.50%
Debt/Equity ratio	0.05	0.05
Cost of debt	4.00%	4.50%

After-tax WACC	7.9%	10.1%


Selected WACC	9.0%

AHC.TO'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 AHC.TO:

cost_of_equity (9.30%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (1.02) + 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.