HEME WACC - Weighted Average Cost of Capital
The WACC of Healthmed Services Ltd (HEME) is 4.9%.
| Range | Selected | |
| Cost of equity | 4.8% - 7.3% | 6.05% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.2% - 5.5% | 4.9% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 0.13 | 0.36 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.8% | 7.3% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.2% | 5.5% |
| Selected WACC | 4.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HEME | Healthmed Services Ltd | 0.59 | 1.43 | 1 |
| AEGY | Alternative Energy Partners Inc | 98.08 | -373.73 | -5.15 |
| ATMS | Artemis Therapeutics Inc | 0 | 0.46 | 0.46 |
| CLV.V | Canoe Mining Ventures Corp | 1 | -2.39 | -1.38 |
| FCIC | FCCC Inc | 25.43 | -0.22 | -0.01 |
| LLL.CN | Lanebury Growth Capital Ltd | 6.66 | -1.16 | -0.2 |
| PTEL | Pegasus Tel Inc | 0.02 | 1.05 | 1.03 |
| SQID.CN | SQID Technologies Ltd | 1.08 | 0 | 0 |
| Low | High | |
| Unlevered beta | -0.05 | 0.09 |
| Relevered beta | -0.3 | 0.04 |
| Adjusted relevered beta | 0.13 | 0.36 |
HEME'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 HEME:
cost_of_equity (6.05%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.13) + 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.