ARDS WACC - Weighted Average Cost of Capital
The WACC of Aridis Pharmaceuticals Inc (ARDS) is 4.5%.
| Range | Selected | |
| Cost of equity | 80.8% - 124.4% | 102.6% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.3% - 4.7% | 4.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 16.72 | 21.35 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 80.8% | 124.4% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 116.45 | 116.45 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.3% | 4.7% |
| Selected WACC | 4.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ARDS | Aridis Pharmaceuticals Inc | 116.45 | 125.65 | 1.46 |
| ABBV | Abbvie Inc | 0.21 | 0.39 | 0.34 |
| ACHV | Achieve Life Sciences Inc | 0.09 | 1.73 | 1.62 |
| AGE | AgeX Therapeutics Inc | 0.65 | -0.7 | -0.47 |
| AMGN | Amgen Inc | 0.41 | 0.36 | 0.28 |
| GILD | Gilead Sciences Inc | 0.21 | 0.33 | 0.29 |
| SZLS.TO | StageZero Life Sciences Ltd | 0.51 | 0.27 | 0.2 |
| VCNX | Vaccinex Inc | 0.04 | 1.54 | 1.5 |
| WINT | Windtree Therapeutics Inc | 5.04 | 1.91 | 0.41 |
| YTEN | Yield10 Bioscience Inc | 3.51 | 0.06 | 0.02 |
| 950220.KQ | Neoimmunetech Inc (Pre-reincorporation) | 0 | 0.44 | 0.44 |
| Low | High | |
| Unlevered beta | 0.29 | 0.41 |
| Relevered beta | 24.46 | 31.37 |
| Adjusted relevered beta | 16.72 | 21.35 |
ARDS'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 ARDS:
cost_of_equity (102.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (16.72) + 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.