CPH.TO
Cipher Pharmaceuticals Inc
Price:  
14.56 
CAD
Volume:  
6,269.00
Canada | Pharmaceuticals
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

CPH.TO WACC - Weighted Average Cost of Capital

The WACC of Cipher Pharmaceuticals Inc (CPH.TO) is 5.3%.

The Cost of Equity of Cipher Pharmaceuticals Inc (CPH.TO) is 5.50%.
The Cost of Debt of Cipher Pharmaceuticals Inc (CPH.TO) is 5.00%.

Range Selected
Cost of equity 4.80% - 6.20% 5.50%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 5.00% - 5.00% 5.00%
WACC 4.7% - 5.8% 5.3%
WACC

CPH.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.33 0.33
Additional risk adjustments 0.0% 0.5%
Cost of equity 4.80% 6.20%
Tax rate 25.90% 26.50%
Debt/Equity ratio 0.15 0.15
Cost of debt 5.00% 5.00%
After-tax WACC 4.7% 5.8%
Selected WACC 5.3%

CPH.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 CPH.TO:

cost_of_equity (5.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.