CRH.TO
CRH Medical Corp
Price:  
4.99 
CAD
Volume:  
88,850.00
Canada | Health Care Providers & Services
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CRH.TO WACC - Weighted Average Cost of Capital

The WACC of CRH Medical Corp (CRH.TO) is 7.0%.

The Cost of Equity of CRH Medical Corp (CRH.TO) is 7.55%.
The Cost of Debt of CRH Medical Corp (CRH.TO) is 6.05%.

Range Selected
Cost of equity 5.30% - 9.80% 7.55%
Tax rate 19.50% - 22.50% 21.00%
Cost of debt 5.10% - 7.00% 6.05%
WACC 5.0% - 8.9% 7.0%
WACC

CRH.TO WACC calculation

Category Low High
Long-term bond rate 3.4% 3.9%
Equity market risk premium 4.7% 5.7%
Adjusted beta 0.4 0.94
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.30% 9.80%
Tax rate 19.50% 22.50%
Debt/Equity ratio 0.25 0.25
Cost of debt 5.10% 7.00%
After-tax WACC 5.0% 8.9%
Selected WACC 7.0%

CRH.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 CRH.TO:

cost_of_equity (7.55%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.4) + 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.