CGEM
Cullinan Oncology Inc
Price:  
7.90 
USD
Volume:  
219,412.00
United States | Biotechnology
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CGEM WACC - Weighted Average Cost of Capital

The WACC of Cullinan Oncology Inc (CGEM) is 10.0%.

The Cost of Equity of Cullinan Oncology Inc (CGEM) is 15.00%.
The Cost of Debt of Cullinan Oncology Inc (CGEM) is 5.00%.

Range Selected
Cost of equity 12.70% - 17.30% 15.00%
Tax rate -% - 3.40% 1.70%
Cost of debt 5.00% - 5.00% 5.00%
WACC 8.9% - 11.1% 10.0%
WACC

CGEM WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.93 2.23
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.70% 17.30%
Tax rate -% 3.40%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 8.9% 11.1%
Selected WACC 10.0%

CGEM'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 CGEM:

cost_of_equity (15.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.93) + 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.