ATIP
ATI Physical Therapy Inc
Price:  
1.79 
USD
Volume:  
3,667,191
United States | Health Care and Social Assistance

ATIP WACC - Weighted Average Cost of Capital

The WACC of ATI Physical Therapy Inc (ATIP) is 23.4%.

The Cost of Equity of ATI Physical Therapy Inc (ATIP) is 121.45%.
The Cost of Debt of ATI Physical Therapy Inc (ATIP) is 23.9%.

RangeSelected
Cost of equity74.8% - 168.1%121.45%
Tax rate3.5% - 5.8%4.65%
Cost of debt23.9% - 23.9%23.9%
WACC23.4% - 23.5%23.4%
WACC

ATIP WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta15.4129.16
Additional risk adjustments0.0%0.5%
Cost of equity74.8%168.1%
Tax rate3.5%5.8%
Debt/Equity ratio
144.89144.89
Cost of debt23.9%23.9%
After-tax WACC23.4%23.5%
Selected WACC23.4%

ATIP WACC - Detailed calculations of Beta

LowHigh
Unlevered beta0.170.31
Relevered beta22.5143.03
Adjusted relevered beta15.4129.16

ATIP'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 ATIP:

cost_of_equity (121.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (15.41) + 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.