FGEN WACC - Weighted Average Cost of Capital
The WACC of FibroGen Inc (FGEN) is 12.7%.
| Range | Selected | |
| Cost of equity | 9.7% - 14.6% | 12.15% |
| Tax rate | 0.1% - 0.2% | 0.15% |
| Cost of debt | 4.8% - 20.9% | 12.85% |
| WACC | 5.8% - 19.6% | 12.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.27 | 1.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.7% | 14.6% |
| Tax rate | 0.1% | 0.2% |
| Debt/Equity ratio | 3.98 | 3.98 |
| Cost of debt | 4.8% | 20.9% |
| After-tax WACC | 5.8% | 19.6% |
| Selected WACC | 12.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| FGEN | FibroGen Inc | 3.98 | 0.68 | 0.14 |
| ABBV | Abbvie Inc | 0.2 | 0.34 | 0.28 |
| AMGN | Amgen Inc | 0.38 | 0.39 | 0.28 |
| APLS | Apellis Pharmaceuticals Inc | 0.19 | 1.02 | 0.86 |
| BLUE | bluebird bio Inc | 3.46 | 0.5 | 0.11 |
| FOLD | Amicus Therapeutics Inc | 0.21 | 0.52 | 0.43 |
| GBT | Global Blood Therapeutics Inc | 0.13 | 0.47 | 0.41 |
| IMCR | Immunocore Holdings PLC | 0.3 | 0.85 | 0.65 |
| LGND | Ligand Pharmaceuticals Inc | 0 | 0.96 | 0.96 |
| 950220.KQ | Neoimmunetech Inc (Pre-reincorporation) | 0.01 | 0.08 | 0.07 |
| Low | High | |
| Unlevered beta | 0.28 | 0.42 |
| Relevered beta | 1.4 | 2.09 |
| Adjusted relevered beta | 1.27 | 1.73 |
FGEN'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 FGEN:
cost_of_equity (12.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.27) + 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.