BTAI
BioXcel Therapeutics Inc
Price:  
1.93 
USD
Volume:  
215,156.00
United States | Biotechnology
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BioXcel WACC - Weighted Average Cost of Capital

The WACC of BioXcel Therapeutics Inc (BTAI) is 6.1%.

The Cost of Equity of BioXcel Therapeutics Inc (BTAI) is 15.70%.
The Cost of Debt of BioXcel Therapeutics Inc (BTAI) is 7.00%.

Range Selected
Cost of equity 11.40% - 20.00% 15.70%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 7.00% - 7.00% 7.00%
WACC 5.8% - 6.5% 6.1%
WACC

BioXcel WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.64 2.71
Additional risk adjustments 0.0% 0.5%
Cost of equity 11.40% 20.00%
Tax rate 26.20% 27.00%
Debt/Equity ratio 9.56 9.56
Cost of debt 7.00% 7.00%
After-tax WACC 5.8% 6.5%
Selected WACC 6.1%

BioXcel'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 BioXcel:

cost_of_equity (15.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.64) + 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.