CYTK
Cytokinetics Inc
Price:  
34.66 
USD
Volume:  
1,301,094
United States | Biotechnology

CYTK WACC - Weighted Average Cost of Capital

The WACC of Cytokinetics Inc (CYTK) is 8.1%.

The Cost of Equity of Cytokinetics Inc (CYTK) is 8.6%.
The Cost of Debt of Cytokinetics Inc (CYTK) is 6.4%.

RangeSelected
Cost of equity6.4% - 10.8%8.6%
Tax rate26.2% - 27.0%26.6%
Cost of debt5.8% - 7.0%6.4%
WACC6.1% - 10.0%8.1%
WACC

CYTK WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.541.06
Additional risk adjustments0.0%0.5%
Cost of equity6.4%10.8%
Tax rate26.2%27.0%
Debt/Equity ratio
0.160.16
Cost of debt5.8%7.0%
After-tax WACC6.1%10.0%
Selected WACC8.1%

CYTK'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 CYTK:

cost_of_equity (8.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.54) + 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.