INVA WACC - Weighted Average Cost of Capital
The WACC of Innoviva Inc (INVA) is 6.6%.
| Range | Selected | |
| Cost of equity | 6.7% - 8.8% | 7.75% |
| Tax rate | 17.1% - 19.6% | 18.35% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.8% - 7.4% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.61 | 0.7 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 8.8% |
| Tax rate | 17.1% | 19.6% |
| Debt/Equity ratio | 0.36 | 0.36 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.8% | 7.4% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| INVA | Innoviva Inc | 0.36 | 0.34 | 0.26 |
| ACB.TO | Aurora Cannabis Inc | 0.33 | 1.49 | 1.17 |
| AMPH | Amphastar Pharmaceuticals Inc | 0.55 | 0.54 | 0.37 |
| ANIP | ANI Pharmaceuticals Inc | 0.44 | 0.28 | 0.21 |
| BDSI | BioDelivery Sciences International Inc | 0.11 | 0.55 | 0.5 |
| CWEB.TO | Charlotte's Web Holdings Inc | 2.93 | 0.87 | 0.25 |
| LCI | Lannett Company Inc | 83.32 | 0.95 | 0.01 |
| OSMT | Osmotica Pharmaceuticals PLC | 2.38 | 1.08 | 0.36 |
| TBPH | Theravance Biopharma Inc | 0.05 | 1.1 | 1.05 |
| TILT.CN | TILT Holdings Inc | 0.51 | 1 | 0.71 |
| Low | High | |
| Unlevered beta | 0.32 | 0.42 |
| Relevered beta | 0.42 | 0.55 |
| Adjusted relevered beta | 0.61 | 0.7 |
INVA'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 INVA:
cost_of_equity (7.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.61) + 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.