EVOK WACC - Weighted Average Cost of Capital
The WACC of Evoke Pharma Inc (EVOK) is 5.0%.
| Range | Selected | |
| Cost of equity | 5.7% - 7.6% | 6.65% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.6% - 5.4% | 5.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.41 | 0.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 7.6% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1.23 | 1.23 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.6% | 5.4% |
| Selected WACC | 5.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| EVOK | Evoke Pharma Inc | 1.23 | 1.38 | 0.73 |
| ALID | Allied Corp | 5.05 | -0.37 | -0.08 |
| ASP.TO | Acerus Pharmaceuticals Corporation | 11.65 | 1.14 | 0.12 |
| BAMM.CN | Body and Mind Inc | 4.02 | 0.18 | 0.05 |
| COOL.CN | Core One Labs Inc | 0.04 | 0.14 | 0.13 |
| CURR | Cure Pharmaceutical Holding Corp | 0 | -0.29 | -0.29 |
| EASY.CN | Speakeasy Cannabis Club Ltd | 0.12 | 1.03 | 0.94 |
| PVCT | Provectus Biopharmaceuticals Inc | 0.1 | 0.08 | 0.07 |
| TBP.TO | Tetra Bio Pharma Inc | 0.29 | 1.87 | 1.54 |
| Low | High | |
| Unlevered beta | 0.08 | 0.13 |
| Relevered beta | 0.12 | 0.24 |
| Adjusted relevered beta | 0.41 | 0.49 |
EVOK'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 EVOK:
cost_of_equity (6.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.41) + 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.