IRMD WACC - Weighted Average Cost of Capital
The WACC of IRadimed Corp (IRMD) is 5.8%.
| Range | Selected | |
| Cost of equity | 5.5% - 9.7% | 7.6% |
| Tax rate | 20.7% - 20.8% | 20.75% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.7% - 6.8% | 5.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.35 | 0.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 9.7% |
| Tax rate | 20.7% | 20.8% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.7% | 6.8% |
| Selected WACC | 5.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IRMD | IRadimed Corp | 1.12 | 0.9 | 0.47 |
| AFIB | Acutus Medical Inc | 35.12 | 0.7 | 0.02 |
| BIOL | BIOLASE Inc | 46.82 | 0.24 | 0.01 |
| CFMS | Conformis Inc | 1.16 | -0.12 | -0.06 |
| CTSO | Cytosorbents Corp | 0.25 | 0.24 | 0.2 |
| DRIO | DarioHealth Corp | 1.05 | 1.46 | 0.8 |
| EDAP | Edap Tms SA | 0.08 | 1.62 | 1.53 |
| HTL.V | Hamilton Thorne Ltd | 0.13 | -0.61 | -0.55 |
| MLSS | Milestone Scientific Inc | 0 | 1.02 | 1.02 |
| PDEX | Pro-Dex Inc | 0.08 | -0.06 | -0.06 |
| STIM | Neuronetics Inc | 0.2 | 1.41 | 1.22 |
| Low | High | |
| Unlevered beta | 0.02 | 0.47 |
| Relevered beta | 0.03 | 0.79 |
| Adjusted relevered beta | 0.35 | 0.86 |
IRMD'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 IRMD:
cost_of_equity (7.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.35) + 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.