The WACC of Edap Tms SA (EDAP) is 5.9%.
Range | Selected | |
Cost of equity | 5.3% - 7.3% | 6.3% |
Tax rate | 14.1% - 28.8% | 21.45% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 5.0% - 6.8% | 5.9% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.31 | 0.43 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.3% | 7.3% |
Tax rate | 14.1% | 28.8% |
Debt/Equity ratio | 0.23 | 0.23 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 5.0% | 6.8% |
Selected WACC | 5.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
EDAP | Edap Tms SA | 0.23 | 1.18 | 0.99 |
BIOL | BIOLASE Inc | 46.82 | 0.24 | 0.01 |
CFMS | Conformis Inc | 1.16 | -0.12 | -0.06 |
CTSO | Cytosorbents Corp | 0.21 | 0.22 | 0.19 |
HTL.V | Hamilton Thorne Ltd | 0.13 | -0.61 | -0.55 |
MSON | Misonix Inc | 0.1 | 1.35 | 1.25 |
SSKN | STRATA Skin Sciences Inc | 1.54 | 0.17 | 0.08 |
STIM | Neuronetics Inc | 0.23 | 1.1 | 0.93 |
ALCOR.PA | Biocorp Production SA | 0.04 | -0.31 | -0.3 |
AMPLI.PA | Amplitude Surgical SA | 0.4 | -0.23 | -0.18 |
Low | High | |
Unlevered beta | -0.02 | 0.12 |
Relevered beta | -0.03 | 0.15 |
Adjusted relevered beta | 0.31 | 0.43 |
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.