MED.SW WACC - Weighted Average Cost of Capital

The WACC of Medartis Holding AG (MED.SW) is 6.0%.

The Cost of Equity of Medartis Holding AG (MED.SW) is 6.25%.

The Cost of Debt of Medartis Holding AG (MED.SW) is 5.20%.

	Range	Selected
Cost of equity	4.80% - 7.70%	6.25%
Tax rate	16.80% - 18.00%	17.40%
Cost of debt	4.20% - 6.20%	5.20%
WACC	4.7% - 7.4%	6.0%

WACC

MED.SW WACC calculation

Category	Low	High

Long-term bond rate	1.0%	1.5%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.37	0.61

Additional risk adjustments	2.0%	2.5%
Cost of equity	4.80%	7.70%

Tax rate	16.80%	18.00%
Debt/Equity ratio	0.13	0.13
Cost of debt	4.20%	6.20%

After-tax WACC	4.7%	7.4%


Selected WACC	6.0%

MED.SW'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 MED.SW:

cost_of_equity (6.25%) = risk_free_rate (1.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.37) + risk_adjustments (2.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.