The WACC of Corbus Pharmaceuticals Holdings Inc (CRBP) is 6.2%.
Range | Selected | |
Cost of equity | 6.8% - 10.5% | 8.65% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 5.3% - 7.1% | 6.2% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.65 | 1 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.8% | 10.5% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 5.3% | 7.1% |
Selected WACC | 6.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CRBP | Corbus Pharmaceuticals Holdings Inc | 1.16 | 2.06 | 1.12 |
ADMA | ADMA Biologics Inc | 0.02 | 0.9 | 0.89 |
CASI | CASI Pharmaceuticals Inc | 0.99 | 0.34 | 0.2 |
CTIC | CTI Biopharma Corp | 0.09 | 0.08 | 0.08 |
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 |
MRNA | Moderna Inc | 0.01 | 0.96 | 0.95 |
OTLK | Outlook Therapeutics Inc | 0.43 | 0.78 | 0.59 |
SVRA | Savara Inc | 0.07 | 1.08 | 1.03 |
TTOO | T2 Biosystems Inc | 10.98 | -1.11 | -0.12 |
Low | High | |
Unlevered beta | 0.32 | 0.59 |
Relevered beta | 0.48 | 1 |
Adjusted relevered beta | 0.65 | 1 |
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 CRBP:
cost_of_equity (8.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.65) + 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.