PHM.MC
Pharma Mar SA
Price:  
91.90 
EUR
Volume:  
60,732.00
Spain | Biotechnology
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PHM.MC WACC - Weighted Average Cost of Capital

The WACC of Pharma Mar SA (PHM.MC) is 9.4%.

The Cost of Equity of Pharma Mar SA (PHM.MC) is 9.55%.
The Cost of Debt of Pharma Mar SA (PHM.MC) is 5.85%.

Range Selected
Cost of equity 7.10% - 12.00% 9.55%
Tax rate 25.00% - 25.00% 25.00%
Cost of debt 5.50% - 6.20% 5.85%
WACC 7.0% - 11.8% 9.4%
WACC

PHM.MC WACC calculation

Category Low High
Long-term bond rate 3.1% 3.6%
Equity market risk premium 7.4% 8.4%
Adjusted beta 0.54 0.94
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.10% 12.00%
Tax rate 25.00% 25.00%
Debt/Equity ratio 0.03 0.03
Cost of debt 5.50% 6.20%
After-tax WACC 7.0% 11.8%
Selected WACC 9.4%

PHM.MC'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 PHM.MC:

cost_of_equity (9.55%) = risk_free_rate (3.35%) + equity_risk_premium (7.90%) * adjusted_beta (0.54) + 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.