SPHS
Sophiris Bio Inc
Price:  
0.00 
USD
Volume:  
1,830.00
United States | Biotechnology
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SPHS WACC - Weighted Average Cost of Capital

The WACC of Sophiris Bio Inc (SPHS) is 4.4%.

The Cost of Equity of Sophiris Bio Inc (SPHS) is 147,061.60%.
The Cost of Debt of Sophiris Bio Inc (SPHS) is 5.00%.

Range Selected
Cost of equity 1,083.30% - 293,039.90% 147,061.60%
Tax rate 27.00% - 27.00% 27.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 3.7% - 5.1% 4.4%
WACC

SPHS WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 254.74 55922.86
Additional risk adjustments 0.0% 0.5%
Cost of equity 1,083.30% 293,039.90%
Tax rate 27.00% 27.00%
Debt/Equity ratio 203394.26 203394.26
Cost of debt 5.00% 5.00%
After-tax WACC 3.7% 5.1%
Selected WACC 4.4%

SPHS'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 SPHS:

cost_of_equity (147,061.60%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (254.74) + 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.