DR.TO WACC - Weighted Average Cost of Capital
The WACC of Medical Facilities Corp (DR.TO) is 7.3%.
| Range | Selected | |
| Cost of equity | 6.9% - 10.6% | 8.75% |
| Tax rate | 10.9% - 13.6% | 12.25% |
| Cost of debt | 4.2% - 5.8% | 5% |
| WACC | 5.8% - 8.7% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.74 | 1.06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.9% | 10.6% |
| Tax rate | 10.9% | 13.6% |
| Debt/Equity ratio | 0.52 | 0.52 |
| Cost of debt | 4.2% | 5.8% |
| After-tax WACC | 5.8% | 8.7% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| DR.TO | Medical Facilities Corp | 0.52 | 0.4 | 0.28 |
| MPARK.IS | MLP Saglik Hizmetleri AS | 0.48 | 1.01 | 0.71 |
| BICX | BioCorRx Inc | 0.43 | 1.43 | 1.04 |
| DVCR | Diversicare Healthcare Services Inc | 0.86 | 0.9 | 0.51 |
| FVE | Five Star Senior Living Inc | 0.13 | 0.95 | 0.85 |
| HNGR | Hanger Inc | 0.71 | 1.32 | 0.81 |
| IMAC | IMAC Holdings Inc | 0.01 | -1 | -0.99 |
| NFH | New Frontier Health Corp | 0.19 | 0.14 | 0.12 |
| SIA.TO | Sienna Senior Living Inc | 0.58 | 0.28 | 0.18 |
| USPH | U.S. Physical Therapy Inc | 0.13 | 0.98 | 0.88 |
| Low | High | |
| Unlevered beta | 0.42 | 0.75 |
| Relevered beta | 0.61 | 1.09 |
| Adjusted relevered beta | 0.74 | 1.06 |
DR.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 DR.TO:
cost_of_equity (8.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.74) + 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.