EGRX
Eagle Pharmaceuticals Inc
Price:  
2.14 
USD
Volume:  
4,664,101.00
United States | Biotechnology
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EGRX WACC - Weighted Average Cost of Capital

The WACC of Eagle Pharmaceuticals Inc (EGRX) is 7.4%.

The Cost of Equity of Eagle Pharmaceuticals Inc (EGRX) is 14.55%.
The Cost of Debt of Eagle Pharmaceuticals Inc (EGRX) is 5.00%.

Range Selected
Cost of equity 12.30% - 16.80% 14.55%
Tax rate 39.20% - 44.10% 41.65%
Cost of debt 4.60% - 5.40% 5.00%
WACC 6.5% - 8.4% 7.4%
WACC

EGRX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.83 2.13
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.30% 16.80%
Tax rate 39.20% 44.10%
Debt/Equity ratio 1.57 1.57
Cost of debt 4.60% 5.40%
After-tax WACC 6.5% 8.4%
Selected WACC 7.4%

EGRX'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 EGRX:

cost_of_equity (14.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.83) + 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.