IHC.L WACC - Weighted Average Cost of Capital
The WACC of Inspiration Healthcare Group PLC (IHC.L) is 7.6%.
| Range | Selected | |
| Cost of equity | 6.8% - 8.7% | 7.75% |
| Tax rate | 8.8% - 20.1% | 14.45% |
| Cost of debt | 7.0% - 10.2% | 8.6% |
| WACC | 6.6% - 8.5% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.47 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 8.7% |
| Tax rate | 8.8% | 20.1% |
| Debt/Equity ratio | 0.83 | 0.83 |
| Cost of debt | 7.0% | 10.2% |
| After-tax WACC | 6.6% | 8.5% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IHC.L | Inspiration Healthcare Group PLC | 0.83 | 0.61 | 0.35 |
| ALCOR.PA | Biocorp Production SA | 0.04 | -0.31 | -0.3 |
| ALTER.PA | Theradiag SA | 0.12 | 0.11 | 0.1 |
| DIGN.ST | Dignitana AB | 0.05 | -0.43 | -0.42 |
| EOSI.PA | EOS Imaging SA | 0.43 | 0.2 | 0.14 |
| GME.DE | Geratherm Medical AG | 0.41 | 0.27 | 0.2 |
| NXTMH.HE | Nexstim Oyj | 0.1 | 0.18 | 0.16 |
| OPTOMED.HE | Optomed Plc | 0.05 | 0.88 | 0.85 |
| SPEC.ST | SpectraCure AB (publ) | 0.07 | -1.45 | -1.37 |
| STIL.ST | Stille AB | 0.03 | 0.34 | 0.33 |
| Low | High | |
| Unlevered beta | 0.12 | 0.18 |
| Relevered beta | 0.21 | 0.31 |
| Adjusted relevered beta | 0.47 | 0.54 |
IHC.L'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 IHC.L:
cost_of_equity (7.75%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.47) + 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.