BHC.TO WACC - Weighted Average Cost of Capital
The WACC of Bausch Health Companies Inc (BHC.TO) is 9.4%.
| Range | Selected | |
| Cost of equity | 15.5% - 27.7% | 21.6% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 6.9% - 14.9% | 10.9% |
| WACC | 6.1% - 12.6% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 2.43 | 3.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.5% | 27.7% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 9.12 | 9.12 |
| Cost of debt | 6.9% | 14.9% |
| After-tax WACC | 6.1% | 12.6% |
| Selected WACC | 9.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BHC.TO | Bausch Health Companies Inc | 9.12 | 1.17 | 0.15 |
| ACB.TO | Aurora Cannabis Inc | 0.31 | 1.61 | 1.31 |
| CTLT | Catalent Inc | 0.43 | 0.41 | 0.31 |
| CURA.CN | Curaleaf Holdings Inc | 0.23 | 1.48 | 1.27 |
| ENDP | Endo International PLC | 113.89 | 1.1 | 0.01 |
| GTII.CN | Green Thumb Industries Inc | 0.18 | 0.97 | 0.86 |
| HZNP | Horizon Therapeutics PLC | 0.1 | -0.28 | -0.27 |
| JAZZ | Jazz Pharmaceuticals PLC | 0.9 | 0.94 | 0.57 |
| TRUL.CN | Trulieve Cannabis Corp | 0.98 | 1.5 | 0.87 |
| VTRS | Viatris Inc | 1.31 | 0.92 | 0.47 |
| Low | High | |
| Unlevered beta | 0.41 | 0.68 |
| Relevered beta | 3.13 | 5.25 |
| Adjusted relevered beta | 2.43 | 3.85 |
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 (21.60%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (2.43) + 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.