PRPO WACC - Weighted Average Cost of Capital
The WACC of Precipio Inc (PRPO) is 6.6%.
| Range | Selected | |
| Cost of equity | 5.6% - 7.6% | 6.6% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 7.0% - 8.9% | 7.95% |
| WACC | 5.6% - 7.5% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.38 | 0.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 7.6% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 7.0% | 8.9% |
| After-tax WACC | 5.6% | 7.5% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PRPO | Precipio Inc | 0.09 | 0.96 | 0.9 |
| CI | Cigna Corp | 0.35 | 0.22 | 0.18 |
| CSTL | Castle Biosciences Inc | 0.02 | 0.33 | 0.32 |
| DIGP | Digipath Inc | 1.96 | -2.09 | -0.86 |
| INFU | InfuSystem Holdings Inc | 0.21 | 1.63 | 1.42 |
| LFPI | LifePoint Inc | 4378.49 | 0 | 0 |
| MDRM | Modern Mobility Aids Inc | 0.87 | -0.13 | -0.08 |
| MJNA | Medical Marijuana Inc | 7.02 | 0.46 | 0.07 |
| PDH.V | Premier Diversified Holdings Inc | 1.28 | 0.11 | 0.06 |
| PROG | Progenity Inc | 0.78 | 1.02 | 0.65 |
| Low | High | |
| Unlevered beta | 0.07 | 0.24 |
| Relevered beta | 0.07 | 0.24 |
| Adjusted relevered beta | 0.38 | 0.49 |
PRPO'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 PRPO:
cost_of_equity (6.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.38) + 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.