DDDD.L WACC - Weighted Average Cost of Capital

The WACC of 4D Pharma PLC (DDDD.L) is 27.1%.

The Cost of Equity of 4D Pharma PLC (DDDD.L) is 8.50%.

The Cost of Debt of 4D Pharma PLC (DDDD.L) is 98.15%.

	Range	Selected
Cost of equity	7.00% - 10.00%	8.50%
Tax rate	14.60% - 15.50%	15.05%
Cost of debt	7.00% - 189.30%	98.15%
WACC	6.7% - 47.5%	27.1%

WACC

DDDD.L WACC calculation

Category	Low	High

Long-term bond rate	4.0%	4.5%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.5	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.00%	10.00%

Tax rate	14.60%	15.50%
Debt/Equity ratio	0.33	0.33
Cost of debt	7.00%	189.30%

After-tax WACC	6.7%	47.5%


Selected WACC	27.1%

DDDD.L'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 DDDD.L:

cost_of_equity (8.50%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.5) + 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.