TRHC WACC - Weighted Average Cost of Capital
The WACC of Tabula Rasa HealthCare Inc (TRHC) is 6.5%.
| Range | Selected | |
| Cost of equity | 5.4% - 10.5% | 7.95% |
| Tax rate | 3.9% - 6.3% | 5.1% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.6% - 8.4% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.34 | 1.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 10.5% |
| Tax rate | 3.9% | 6.3% |
| Debt/Equity ratio | 1.13 | 1.13 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.6% | 8.4% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TRHC | Tabula Rasa HealthCare Inc | 1.13 | 1.4 | 0.68 |
| APYI | Aspyra Inc | 0.53 | 0.2 | 0.13 |
| HCAT | Health Catalyst Inc | 1.34 | 1.11 | 0.49 |
| HLYK | Healthlynked Corp | 0.1 | 1.93 | 1.77 |
| KSI.V | Kneat.com Inc | 0.04 | 0.51 | 0.49 |
| MITI | Mitesco Inc | 0.44 | -1.21 | -0.86 |
| MLKNA | MedLink International Inc | 0.45 | 1.22 | 0.86 |
| MTBC | MTBC Inc | 0.17 | 0.85 | 0.73 |
| NH | NantHealth Inc | 29.54 | 0.4 | 0.01 |
| EMIS.L | EMIS Group PLC | 0 | -0.11 | -0.11 |
| Low | High | |
| Unlevered beta | 0.35 | 0.57 |
| Relevered beta | 0.01 | 1.01 |
| Adjusted relevered beta | 0.34 | 1.01 |
TRHC'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 TRHC:
cost_of_equity (7.95%) = 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.