OTRK
Ontrak Inc
Price:  
0.33 
USD
Volume:  
2,293,274.00
United States | Health Care Providers & Services
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OTRK WACC - Weighted Average Cost of Capital

The WACC of Ontrak Inc (OTRK) is 7.9%.

The Cost of Equity of Ontrak Inc (OTRK) is 27.90%.
The Cost of Debt of Ontrak Inc (OTRK) is 6.85%.

Range Selected
Cost of equity 21.80% - 34.00% 27.90%
Tax rate 0.20% - 0.30% 0.25%
Cost of debt 6.70% - 7.00% 6.85%
WACC 7.4% - 8.4% 7.9%
WACC

OTRK WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 3.9 5.2
Additional risk adjustments 0.0% 0.5%
Cost of equity 21.80% 34.00%
Tax rate 0.20% 0.30%
Debt/Equity ratio 18.56 18.56
Cost of debt 6.70% 7.00%
After-tax WACC 7.4% 8.4%
Selected WACC 7.9%

OTRK'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 OTRK:

cost_of_equity (27.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (3.9) + 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.