MDRX
Allscripts Healthcare Solutions Inc
Price:  
6.81 
USD
Volume:  
81,920,720.00
United States | Health Care Technology
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MDRX WACC - Weighted Average Cost of Capital

The WACC of Allscripts Healthcare Solutions Inc (MDRX) is 6.7%.

The Cost of Equity of Allscripts Healthcare Solutions Inc (MDRX) is 7.30%.
The Cost of Debt of Allscripts Healthcare Solutions Inc (MDRX) is 5.50%.

Range Selected
Cost of equity 6.20% - 8.40% 7.30%
Tax rate 16.10% - 22.60% 19.35%
Cost of debt 4.00% - 7.00% 5.50%
WACC 5.6% - 7.7% 6.7%
WACC

MDRX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.5 0.63
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.20% 8.40%
Tax rate 16.10% 22.60%
Debt/Equity ratio 0.27 0.27
Cost of debt 4.00% 7.00%
After-tax WACC 5.6% 7.7%
Selected WACC 6.7%

MDRX'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 MDRX:

cost_of_equity (7.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.5) + 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.