PHR
Phreesia Inc
Price:  
25.72 
USD
Volume:  
429,925.00
United States | Health Care Technology
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PHR WACC - Weighted Average Cost of Capital

The WACC of Phreesia Inc (PHR) is 7.0%.

The Cost of Equity of Phreesia Inc (PHR) is 7.00%.
The Cost of Debt of Phreesia Inc (PHR) is 9.55%.

Range Selected
Cost of equity 5.40% - 8.60% 7.00%
Tax rate 0.20% - 0.60% 0.40%
Cost of debt 7.00% - 12.10% 9.55%
WACC 5.4% - 8.6% 7.0%
WACC

PHR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.34 0.66
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.40% 8.60%
Tax rate 0.20% 0.60%
Debt/Equity ratio 0.01 0.01
Cost of debt 7.00% 12.10%
After-tax WACC 5.4% 8.6%
Selected WACC 7.0%

PHR'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 PHR:

cost_of_equity (7.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.34) + 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.