GLTO
Galecto Inc
Price:  
3.43 
USD
Volume:  
5,901.00
Denmark | Biotechnology
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GLTO WACC - Weighted Average Cost of Capital

The WACC of Galecto Inc (GLTO) is 8.3%.

The Cost of Equity of Galecto Inc (GLTO) is 12.80%.
The Cost of Debt of Galecto Inc (GLTO) is 5.00%.

Range Selected
Cost of equity 9.50% - 16.10% 12.80%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.6% - 9.9% 8.3%
WACC

GLTO WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.23 2.01
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.50% 16.10%
Tax rate 26.20% 27.00%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 6.6% 9.9%
Selected WACC 8.3%

GLTO'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 GLTO:

cost_of_equity (12.80%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.23) + 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.