BHC.TO WACC - Weighted Average Cost of Capital

The WACC of Bausch Health Companies Inc (BHC.TO) is 9.3%.

The Cost of Equity of Bausch Health Companies Inc (BHC.TO) is 25.00%.

The Cost of Debt of Bausch Health Companies Inc (BHC.TO) is 10.90%.

	Range	Selected
Cost of equity	18.50% - 31.50%	25.00%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	6.90% - 14.90%	10.90%
WACC	6.1% - 12.5%	9.3%

WACC

BHC.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	3	4.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.50%	31.50%

Tax rate	25.90%	26.50%
Debt/Equity ratio	12.51	12.51
Cost of debt	6.90%	14.90%

After-tax WACC	6.1%	12.5%


Selected WACC	9.3%

BHC.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 BHC.TO:

cost_of_equity (25.00%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (3) + 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.