FBIO
Fortress Biotech Inc
Price:  
1.69 
USD
Volume:  
161,975.00
United States | Biotechnology
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FBIO WACC - Weighted Average Cost of Capital

The WACC of Fortress Biotech Inc (FBIO) is 9.5%.

The Cost of Equity of Fortress Biotech Inc (FBIO) is 9.50%.
The Cost of Debt of Fortress Biotech Inc (FBIO) is 9.55%.

Range Selected
Cost of equity 7.40% - 11.60% 9.50%
Tax rate 0.20% - 0.30% 0.25%
Cost of debt 7.00% - 12.10% 9.55%
WACC 7.2% - 11.9% 9.5%
WACC

FBIO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.78 1.21
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.40% 11.60%
Tax rate 0.20% 0.30%
Debt/Equity ratio 1.08 1.08
Cost of debt 7.00% 12.10%
After-tax WACC 7.2% 11.9%
Selected WACC 9.5%

FBIO'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 FBIO:

cost_of_equity (9.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.78) + 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.