ALXO
ALX Oncology Holdings Inc
Price:  
0.46 
USD
Volume:  
840,302.00
United States | Biotechnology
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ALXO WACC - Weighted Average Cost of Capital

The WACC of ALX Oncology Holdings Inc (ALXO) is 8.1%.

The Cost of Equity of ALX Oncology Holdings Inc (ALXO) is 9.35%.
The Cost of Debt of ALX Oncology Holdings Inc (ALXO) is 5.00%.

Range Selected
Cost of equity 7.70% - 11.00% 9.35%
Tax rate -% - 0.10% 0.05%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.9% - 9.3% 8.1%
WACC

ALXO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.83 1.1
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.70% 11.00%
Tax rate -% 0.10%
Debt/Equity ratio 0.42 0.42
Cost of debt 5.00% 5.00%
After-tax WACC 6.9% 9.3%
Selected WACC 8.1%

ALXO'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 ALXO:

cost_of_equity (9.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.83) + 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.