GRCL WACC - Weighted Average Cost of Capital
The WACC of Gracell Biotechnologies Inc (GRCL) is 10.3%.
| Range | Selected | |
| Cost of equity | 8.7% - 12.2% | 10.45% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.6% - 12.0% | 10.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.04 | 1.3 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.7% | 12.2% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.6% | 12.0% |
| Selected WACC | 10.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| GRCL | Gracell Biotechnologies Inc | 0.02 | 1.99 | 1.96 |
| ABEO | Abeona Therapeutics Inc | 0.07 | 1.34 | 1.27 |
| FENC | Fennec Pharmaceuticals Inc | 0.11 | 1.95 | 1.81 |
| IFRX | Inflarx NV | 0.01 | 1.41 | 1.4 |
| IMV.TO | IMV Inc | 2.2 | 1.86 | 0.71 |
| MTCR | Metacrine, Inc. | 0.63 | 0.2 | 0.14 |
| MTNB | Matinas BioPharma Holdings Inc | 0 | 1.47 | 1.47 |
| ONCS | OncoSec Medical Inc | 0.57 | -0.12 | -0.08 |
| RVX.TO | Resverlogix Corp | 0.98 | 0.43 | 0.25 |
| 688363.SS | Bloomage Biotechnology Corp Ltd | 0.04 | 1.95 | 1.89 |
| Low | High | |
| Unlevered beta | 1.05 | 1.43 |
| Relevered beta | 1.06 | 1.45 |
| Adjusted relevered beta | 1.04 | 1.3 |
GRCL'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 GRCL:
cost_of_equity (10.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.04) + 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.