PHO.OL
Photocure ASA
Price:  
50.20 
NOK
Volume:  
37,837.00
Norway | Pharmaceuticals
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PHO.OL WACC - Weighted Average Cost of Capital

The WACC of Photocure ASA (PHO.OL) is 6.0%.

The Cost of Equity of Photocure ASA (PHO.OL) is 6.05%.
The Cost of Debt of Photocure ASA (PHO.OL) is 5.00%.

Range Selected
Cost of equity 5.20% - 6.90% 6.05%
Tax rate 22.00% - 22.00% 22.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.2% - 6.9% 6.0%
WACC

PHO.OL WACC calculation

Category Low High
Long-term bond rate 3.3% 3.8%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.36 0.43
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.20% 6.90%
Tax rate 22.00% 22.00%
Debt/Equity ratio 0.02 0.02
Cost of debt 5.00% 5.00%
After-tax WACC 5.2% 6.9%
Selected WACC 6.0%

PHO.OL'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 PHO.OL:

cost_of_equity (6.05%) = risk_free_rate (3.55%) + equity_risk_premium (5.60%) * adjusted_beta (0.36) + 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.