BDSI
BioDelivery Sciences International Inc
Price:  
5.59 
USD
Volume:  
2,109,330.00
United States | Pharmaceuticals
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BDSI WACC - Weighted Average Cost of Capital

The WACC of BioDelivery Sciences International Inc (BDSI) is 7.6%.

The Cost of Equity of BioDelivery Sciences International Inc (BDSI) is 7.75%.
The Cost of Debt of BioDelivery Sciences International Inc (BDSI) is 8.10%.

Range Selected
Cost of equity 6.50% - 9.00% 7.75%
Tax rate 27.00% - 27.00% 27.00%
Cost of debt 4.50% - 11.70% 8.10%
WACC 6.2% - 8.9% 7.6%
WACC

BDSI WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.8 0.91
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.50% 9.00%
Tax rate 27.00% 27.00%
Debt/Equity ratio 0.11 0.11
Cost of debt 4.50% 11.70%
After-tax WACC 6.2% 8.9%
Selected WACC 7.6%

BDSI'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 BDSI:

cost_of_equity (7.75%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.8) + 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.