BHC.TO
Bausch Health Companies Inc
Price:  
6.51 
CAD
Volume:  
104,378.00
Canada | Pharmaceuticals
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

BHC.TO WACC - Weighted Average Cost of Capital

The WACC of Bausch Health Companies Inc (BHC.TO) is 8.9%.

The Cost of Equity of Bausch Health Companies Inc (BHC.TO) is 18.45%.
The Cost of Debt of Bausch Health Companies Inc (BHC.TO) is 10.90%.

Range Selected
Cost of equity 15.10% - 21.80% 18.45%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 6.90% - 14.90% 10.90%
WACC 6.0% - 11.9% 8.9%
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 2.33 2.89
Additional risk adjustments 0.0% 0.5%
Cost of equity 15.10% 21.80%
Tax rate 25.90% 26.50%
Debt/Equity ratio 10.82 10.82
Cost of debt 6.90% 14.90%
After-tax WACC 6.0% 11.9%
Selected WACC 8.9%

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 (18.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (2.33) + 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.