UHT
Universal Health Realty Income Trust
Price:  
41.29 
USD
Volume:  
34,913.00
United States | Equity Real Estate Investment Trusts (REITs)
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UHT WACC - Weighted Average Cost of Capital

The WACC of Universal Health Realty Income Trust (UHT) is 6.4%.

The Cost of Equity of Universal Health Realty Income Trust (UHT) is 7.45%.
The Cost of Debt of Universal Health Realty Income Trust (UHT) is 6.55%.

Range Selected
Cost of equity 6.40% - 8.50% 7.45%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.00% - 9.10% 6.55%
WACC 5.0% - 7.8% 6.4%
WACC

UHT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.55 0.65
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.40% 8.50%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.64 0.64
Cost of debt 4.00% 9.10%
After-tax WACC 5.0% 7.8%
Selected WACC 6.4%

UHT'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 UHT:

cost_of_equity (7.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * 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.