ALHC
Alignment Healthcare Inc
Price:  
15.42 
USD
Volume:  
2,146,229.00
United States | Health Care Providers & Services
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ALHC WACC - Weighted Average Cost of Capital

The WACC of Alignment Healthcare Inc (ALHC) is 8.4%.

The Cost of Equity of Alignment Healthcare Inc (ALHC) is 8.30%.
The Cost of Debt of Alignment Healthcare Inc (ALHC) is 9.50%.

Range Selected
Cost of equity 7.30% - 9.30% 8.30%
Tax rate -% - -% -%
Cost of debt 7.00% - 12.00% 9.50%
WACC 7.3% - 9.6% 8.4%
WACC

ALHC WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.75 0.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.30% 9.30%
Tax rate -% -%
Debt/Equity ratio 0.1 0.1
Cost of debt 7.00% 12.00%
After-tax WACC 7.3% 9.6%
Selected WACC 8.4%

ALHC'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 ALHC:

cost_of_equity (8.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.75) + 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.