PRN.TO
Profound Medical Corp
Price:  
7.80 
CAD
Volume:  
2,424.00
Canada | Health Care Equipment & Supplies
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PRN.TO WACC - Weighted Average Cost of Capital

The WACC of Profound Medical Corp (PRN.TO) is 7.1%.

The Cost of Equity of Profound Medical Corp (PRN.TO) is 7.15%.
The Cost of Debt of Profound Medical Corp (PRN.TO) is 7.00%.

Range Selected
Cost of equity 5.70% - 8.60% 7.15%
Tax rate 0.30% - 0.40% 0.35%
Cost of debt 7.00% - 7.00% 7.00%
WACC 5.7% - 8.5% 7.1%
WACC

PRN.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.49 0.72
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.70% 8.60%
Tax rate 0.30% 0.40%
Debt/Equity ratio 0.03 0.03
Cost of debt 7.00% 7.00%
After-tax WACC 5.7% 8.5%
Selected WACC 7.1%

PRN.TO'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 PRN.TO:

cost_of_equity (7.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.49) + 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.