CFMS WACC - Weighted Average Cost of Capital
The WACC of Conformis Inc (CFMS) is 7.1%.
| Range | Selected | |
| Cost of equity | 5.2% - 7.0% | 6.1% |
| Tax rate | 0.2% - 0.2% | 0.2% |
| Cost of debt | 7.0% - 8.9% | 7.95% |
| WACC | 6.2% - 8.0% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.3 | 0.38 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.2% | 7.0% |
| Tax rate | 0.2% | 0.2% |
| Debt/Equity ratio | 1.16 | 1.16 |
| Cost of debt | 7.0% | 8.9% |
| After-tax WACC | 6.2% | 8.0% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CFMS | Conformis Inc | 1.16 | -0.12 | -0.05 |
| AHPI | Allied Healthcare Products Inc | 658.36 | 1.46 | 0 |
| BDX | Becton Dickinson and Co | 0.41 | -0.14 | -0.1 |
| BIOL | BIOLASE Inc | 46.82 | 0.24 | 0.01 |
| EDAP | Edap Tms SA | 0.21 | 1.2 | 0.99 |
| FONR | Fonar Corp | 0.01 | 0.21 | 0.21 |
| HTL.V | Hamilton Thorne Ltd | 0.13 | -0.61 | -0.54 |
| PDEX | Pro-Dex Inc | 0.08 | -0.2 | -0.19 |
| SSKN | STRATA Skin Sciences Inc | 1.62 | 0.19 | 0.07 |
| TRIB | Trinity Biotech PLC | 9.47 | 1.7 | 0.16 |
| Low | High | |
| Unlevered beta | -0.02 | 0.03 |
| Relevered beta | -0.04 | 0.07 |
| Adjusted relevered beta | 0.3 | 0.38 |
CFMS'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 CFMS:
cost_of_equity (6.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.3) + 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.