TH.TO
Theratechnologies Inc
Price:  
3.28 
CAD
Volume:  
6,014.00
Canada | Biotechnology
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

TH.TO WACC - Weighted Average Cost of Capital

The WACC of Theratechnologies Inc (TH.TO) is 8.6%.

The Cost of Equity of Theratechnologies Inc (TH.TO) is 7.50%.
The Cost of Debt of Theratechnologies Inc (TH.TO) is 11.35%.

Range Selected
Cost of equity 5.90% - 9.10% 7.50%
Tax rate 0.60% - 1.30% 0.95%
Cost of debt 11.00% - 11.70% 11.35%
WACC 7.4% - 9.8% 8.6%
WACC

TH.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.55 0.81
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.90% 9.10%
Tax rate 0.60% 1.30%
Debt/Equity ratio 0.41 0.41
Cost of debt 11.00% 11.70%
After-tax WACC 7.4% 9.8%
Selected WACC 8.6%

TH.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 TH.TO:

cost_of_equity (7.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.55) + 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.