BEAM
Beam Therapeutics Inc
Price:  
20.24 
USD
Volume:  
1,777,907.00
United States | Biotechnology
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BEAM WACC - Weighted Average Cost of Capital

The WACC of Beam Therapeutics Inc (BEAM) is 8.1%.

The Cost of Equity of Beam Therapeutics Inc (BEAM) is 9.35%.
The Cost of Debt of Beam Therapeutics Inc (BEAM) is 6.85%.

Range Selected
Cost of equity 7.40% - 11.30% 9.35%
Tax rate -% - 0.40% 0.20%
Cost of debt 6.70% - 7.00% 6.85%
WACC 7.1% - 9.1% 8.1%
WACC

BEAM WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.77 1.15
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 11.30%
Tax rate -% 0.40%
Debt/Equity ratio 1 1
Cost of debt 6.70% 7.00%
After-tax WACC 7.1% 9.1%
Selected WACC 8.1%

BEAM'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 BEAM:

cost_of_equity (9.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.77) + 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.