Athenex WACC - Weighted Average Cost of Capital
The WACC of Athenex Inc (ATNX) is 8.9%.
| Range | Selected | |
| Cost of equity | 14.2% - 67.7% | 40.95% |
| Tax rate | 2.4% - 3.6% | 3% |
| Cost of debt | 7.0% - 10.5% | 8.75% |
| WACC | 6.9% - 11.0% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 2 | 10.42 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.2% | 67.7% |
| Tax rate | 2.4% | 3.6% |
| Debt/Equity ratio | 70.45 | 70.45 |
| Cost of debt | 7.0% | 10.5% |
| After-tax WACC | 6.9% | 11.0% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ATNX | Athenex Inc | 70.45 | 1.17 | 0.02 |
| ABBV | Abbvie Inc | 0.21 | 0.35 | 0.3 |
| ALPN | Alpine Immune Sciences Inc | 0.86 | 2.91 | 1.59 |
| AZYO | Aziyo Biologics Inc | 1 | -0.14 | -0.07 |
| EGRX | Eagle Pharmaceuticals Inc | 2.25 | -2.07 | -0.65 |
| ESPR | Esperion Therapeutics Inc | 1.85 | 1.69 | 0.6 |
| FLXN | Flexion Therapeutics Inc | 0.5 | 1.56 | 1.05 |
| FREQ | Frequency Therapeutics Inc | 1.28 | 1.1 | 0.49 |
| TH.TO | Theratechnologies Inc | 0.38 | 1.03 | 0.75 |
| TTOO | T2 Biosystems Inc | 10.98 | -1.41 | -0.12 |
| Low | High | |
| Unlevered beta | 0.18 | 0.54 |
| Relevered beta | 2.49 | 15.06 |
| Adjusted relevered beta | 2 | 10.42 |
Athenex'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 Athenex:
cost_of_equity (40.95%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (2) + 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.