ARMP WACC - Weighted Average Cost of Capital
The WACC of Armata Pharmaceuticals Inc (ARMP) is 6.7%.
| Range | Selected | |
| Cost of equity | 10.7% - 15.1% | 12.9% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.0% - 7.4% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.5 | 1.83 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.7% | 15.1% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 2.02 | 2.02 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.0% | 7.4% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ARMP | Armata Pharmaceuticals Inc | 2.02 | 0.37 | 0.15 |
| APM | Aptorum Group Ltd | 0.51 | 1.34 | 0.97 |
| AZRX | AzurRx BioPharma Inc | 0.02 | 1.58 | 1.56 |
| BIOC | Biocept Inc | 2.11 | 1.23 | 0.48 |
| CAPR | Capricor Therapeutics Inc | 0.01 | 1.89 | 1.87 |
| EDT.TO | Spectral Medical Inc | 0.06 | 0.78 | 0.75 |
| GALT | Galectin Therapeutics Inc | 1.22 | 1.63 | 0.86 |
| GNCA | Genocea Biosciences Inc | 74.74 | 1.36 | 0.02 |
| LMNL | Liminal BioSciences Inc | 0.04 | 0.66 | 0.64 |
| SBM.V | Sirona Biochem Corp | 0.14 | 1.61 | 1.46 |
| Low | High | |
| Unlevered beta | 0.7 | 0.91 |
| Relevered beta | 1.75 | 2.24 |
| Adjusted relevered beta | 1.5 | 1.83 |
ARMP'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 ARMP:
cost_of_equity (12.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.5) + 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.