NVCR
Novocure Ltd
Price:  
16.21 
USD
Volume:  
1,109,618
Jersey | Health Care Equipment & Supplies

Novocure WACC - Weighted Average Cost of Capital

The WACC of Novocure Ltd (NVCR) is 7.6%.

The Cost of Equity of Novocure Ltd (NVCR) is 8.55%.
The Cost of Debt of Novocure Ltd (NVCR) is 5.5%.

RangeSelected
Cost of equity7.0% - 10.1%8.55%
Tax rate12.7% - 19.3%16%
Cost of debt4.0% - 7.0%5.5%
WACC6.1% - 9.0%7.6%
WACC

Novocure WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.680.94
Additional risk adjustments0.0%0.5%
Cost of equity7.0%10.1%
Tax rate12.7%19.3%
Debt/Equity ratio
0.330.33
Cost of debt4.0%7.0%
After-tax WACC6.1%9.0%
Selected WACC7.6%

Novocure'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 Novocure:

cost_of_equity (8.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.68) + 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.