CHCT
Community Healthcare Trust Inc
Price:  
16.24 
USD
Volume:  
179,216.00
United States | Equity Real Estate Investment Trusts (REITs)
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CHCT WACC - Weighted Average Cost of Capital

The WACC of Community Healthcare Trust Inc (CHCT) is 10.6%.

The Cost of Equity of Community Healthcare Trust Inc (CHCT) is 6.80%.
The Cost of Debt of Community Healthcare Trust Inc (CHCT) is 14.35%.

Range Selected
Cost of equity 5.80% - 7.80% 6.80%
Tax rate 0.30% - 0.60% 0.45%
Cost of debt 4.80% - 23.90% 14.35%
WACC 5.3% - 16.0% 10.6%
WACC

CHCT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.43 0.52
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.80% 7.80%
Tax rate 0.30% 0.60%
Debt/Equity ratio 1.06 1.06
Cost of debt 4.80% 23.90%
After-tax WACC 5.3% 16.0%
Selected WACC 10.6%

CHCT'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 CHCT:

cost_of_equity (6.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.43) + 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.