AVAH
Aveanna Healthcare Holdings Inc
Price:  
5.50 
USD
Volume:  
1,483,313.00
United States | Health Care Providers & Services
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AVAH WACC - Weighted Average Cost of Capital

The WACC of Aveanna Healthcare Holdings Inc (AVAH) is 10.3%.

The Cost of Equity of Aveanna Healthcare Holdings Inc (AVAH) is 8.65%.
The Cost of Debt of Aveanna Healthcare Holdings Inc (AVAH) is 11.90%.

Range Selected
Cost of equity 7.50% - 9.80% 8.65%
Tax rate 3.20% - 6.00% 4.60%
Cost of debt 8.20% - 15.60% 11.90%
WACC 7.7% - 12.8% 10.3%
WACC

AVAH WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.79 0.87
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.50% 9.80%
Tax rate 3.20% 6.00%
Debt/Equity ratio 1.54 1.54
Cost of debt 8.20% 15.60%
After-tax WACC 7.7% 12.8%
Selected WACC 10.3%

AVAH'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 AVAH:

cost_of_equity (8.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.79) + 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.