IMRA WACC - Weighted Average Cost of Capital
The WACC of Imara Inc (IMRA) is 6.8%.
| Range | Selected | |
| Cost of equity | 8.8% - 11.0% | 9.9% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.2% - 7.3% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 0.92 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 11.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.2% | 7.3% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IMRA | Imara Inc | 0.93 | 0.96 | 0.57 |
| AGRX | Agile Therapeutics Inc | 0.16 | -0.34 | -0.3 |
| BUDZ | Weed Inc | 0.1 | -0.35 | -0.32 |
| BXRX | Baudax Bio Inc | 7.49 | 3.46 | 0.54 |
| LLY | Eli Lilly and Co | 0.05 | 0.79 | 0.76 |
| LQDA | Liquidia Corp | 0.1 | 1.96 | 1.83 |
| MRK | Merck & Co Inc | 0.19 | 0.4 | 0.36 |
| NUMI.V | Numinus Wellness Inc | 0 | 1.05 | 1.05 |
| OTIC | Otonomy Inc | 2.47 | 1.53 | 0.55 |
| PRTT | Protect Pharmaceutical Corp | 0 | 0.67 | 0.67 |
| RVV.CN | Revive Therapeutics Ltd | 0 | 3.16 | 3.15 |
| Low | High | |
| Unlevered beta | 0.55 | 0.67 |
| Relevered beta | 0.88 | 0.97 |
| Adjusted relevered beta | 0.92 | 0.98 |
IMRA'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 IMRA:
cost_of_equity (9.90%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.92) + 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.