EDAP
Edap Tms SA
Price:  
1.53 
USD
Volume:  
42,240
France | Health Care Equipment & Supplies

EDAP WACC - Weighted Average Cost of Capital

The WACC of Edap Tms SA (EDAP) is 5.9%.

The Cost of Equity of Edap Tms SA (EDAP) is 6.3%.
The Cost of Debt of Edap Tms SA (EDAP) is 5.5%.

RangeSelected
Cost of equity5.3% - 7.3%6.3%
Tax rate14.1% - 28.8%21.45%
Cost of debt4.0% - 7.0%5.5%
WACC5.0% - 6.8%5.9%
WACC

EDAP WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.310.43
Additional risk adjustments0.0%0.5%
Cost of equity5.3%7.3%
Tax rate14.1%28.8%
Debt/Equity ratio
0.230.23
Cost of debt4.0%7.0%
After-tax WACC5.0%6.8%
Selected WACC5.9%

EDAP'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 EDAP:

cost_of_equity (6.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.31) + 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.