BBIO
BridgeBio Pharma Inc
Price:  
34.25 
USD
Volume:  
2,967,832.00
United States | Biotechnology
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BridgeBio WACC - Weighted Average Cost of Capital

The WACC of BridgeBio Pharma Inc (BBIO) is 7.5%.

The Cost of Equity of BridgeBio Pharma Inc (BBIO) is 8.65%.
The Cost of Debt of BridgeBio Pharma Inc (BBIO) is 5.80%.

Range Selected
Cost of equity 6.90% - 10.40% 8.65%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 4.60% - 7.00% 5.80%
WACC 6.0% - 9.0% 7.5%
WACC

BridgeBio WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.65 0.98
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 10.40%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.34 0.34
Cost of debt 4.60% 7.00%
After-tax WACC 6.0% 9.0%
Selected WACC 7.5%

BridgeBio'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 BridgeBio:

cost_of_equity (8.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.65) + 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.