FNCH
Finch Therapeutics Group Inc
Price:  
1.80 
USD
Volume:  
629,479.00
United States | Biotechnology
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FNCH WACC - Weighted Average Cost of Capital

The WACC of Finch Therapeutics Group Inc (FNCH) is 7.3%.

The Cost of Equity of Finch Therapeutics Group Inc (FNCH) is 9.20%.
The Cost of Debt of Finch Therapeutics Group Inc (FNCH) is 7.00%.

Range Selected
Cost of equity 7.60% - 10.80% 9.20%
Tax rate 22.10% - 22.30% 22.20%
Cost of debt 7.00% - 7.00% 7.00%
WACC 6.5% - 8.1% 7.3%
WACC

FNCH WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.82 1.05
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.60% 10.80%
Tax rate 22.10% 22.30%
Debt/Equity ratio 1 1
Cost of debt 7.00% 7.00%
After-tax WACC 6.5% 8.1%
Selected WACC 7.3%

FNCH'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 FNCH:

cost_of_equity (9.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.82) + 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.