The WACC of Joint Corp (JYNT) is 5.0%.
Range | Selected | |
Cost of equity | 6.0% - 7.9% | 6.95% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 4.1% - 4.5% | 4.3% |
WACC | 4.5% - 5.6% | 5.0% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.47 | 0.53 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.0% | 7.9% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 4.1% | 4.5% |
After-tax WACC | 4.5% | 5.6% |
Selected WACC | 5.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
JYNT | Joint Corp | 0.89 | 1.15 | 0.7 |
BDSX | Biodesix, Inc. | 0.92 | 0.27 | 0.16 |
BICX | BioCorRx Inc | 0.43 | 1.43 | 1.09 |
BKD | Brookdale Senior Living Inc | 2.72 | 0.34 | 0.11 |
CYH | Community Health Systems Inc | 23.94 | 1.41 | 0.08 |
DR.TO | Medical Facilities Corp | 0.48 | 0.41 | 0.31 |
GRST | Ethema Health Corp | 2.26 | -0.08 | -0.03 |
IMAC | IMAC Holdings Inc | 0.01 | -1 | -0.99 |
NFH | New Frontier Health Corp | 0.19 | 0.14 | 0.12 |
SIA.TO | Sienna Senior Living Inc | 0.59 | 0.28 | 0.2 |
USPH | U.S. Physical Therapy Inc | 0.12 | 1.01 | 0.93 |
Low | High | |
Unlevered beta | 0.12 | 0.2 |
Relevered beta | 0.21 | 0.3 |
Adjusted relevered beta | 0.47 | 0.53 |
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 JYNT:
cost_of_equity (6.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * 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.