CASI WACC - Weighted Average Cost of Capital
The WACC of CASI Pharmaceuticals Inc (CASI) is 6.2%.
| Range | Selected | |
| Cost of equity | 6.0% - 8.7% | 7.35% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 5.6% - 6.9% | 6.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.45 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 8.7% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 5.6% | 6.9% |
| Selected WACC | 6.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CASI | CASI Pharmaceuticals Inc | 1.17 | 0.25 | 0.13 |
| ABBV | Abbvie Inc | 0.21 | 0.35 | 0.31 |
| AMGN | Amgen Inc | 0.42 | 0.35 | 0.27 |
| CTIC | CTI Biopharma Corp | 0.09 | 0.08 | 0.08 |
| EQ | Equillium Inc | 1 | 0.34 | 0.2 |
| FREQ | Frequency Therapeutics Inc | 1.28 | 1.1 | 0.57 |
| GNCA | Genocea Biosciences Inc | 74.74 | 1.36 | 0.02 |
| HTBX | Heat Biologics Inc | 0.01 | 0.32 | 0.32 |
| OTLK | Outlook Therapeutics Inc | 0.71 | 0.44 | 0.29 |
| TTOO | T2 Biosystems Inc | 10.98 | -1.41 | -0.16 |
| VTVT | vTv Therapeutics Inc | 1.01 | 1.34 | 0.77 |
| Low | High | |
| Unlevered beta | 0.2 | 0.29 |
| Relevered beta | 0.18 | 0.52 |
| Adjusted relevered beta | 0.45 | 0.68 |
CASI'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 CASI:
cost_of_equity (7.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.45) + 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.