FBRX WACC - Weighted Average Cost of Capital
The WACC of Forte Biosciences Inc (FBRX) is 8.4%.
| Range | Selected | |
| Cost of equity | 10.1% - 16.2% | 13.15% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.9% - 9.9% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.35 | 2.03 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.1% | 16.2% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.9% | 9.9% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FBRX | Forte Biosciences Inc | 0.98 | 2.27 | 1.33 |
| BLU.TO | BELLUS Health Inc | 0 | 0.67 | 0.67 |
| CUE | Cue Biopharma Inc | 0.09 | 1.68 | 1.58 |
| DBTX | Decibel Therapeutics Inc | 0 | 1.71 | 1.71 |
| LCTX | Lineage Cell Therapeutics Inc | 0 | 1.39 | 1.39 |
| MRNA | Moderna Inc | 0.01 | 1.03 | 1.02 |
| NCNA | NuCana PLC | 1.19 | 1.26 | 0.67 |
| OCX | OncoCyte Corp | 0.01 | 0.35 | 0.35 |
| ONCR | Oncorus Inc | 6.17 | 2.04 | 0.37 |
| PRQR | ProQR Therapeutics NV | 0.11 | 2.07 | 1.91 |
| SNSE | Sensei Biotherapeutics Inc | 0.11 | 1.95 | 1.81 |
| Low | High | |
| Unlevered beta | 1.02 | 1.39 |
| Relevered beta | 1.52 | 2.54 |
| Adjusted relevered beta | 1.35 | 2.03 |
FBRX'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 FBRX:
cost_of_equity (13.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.35) + 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.