IPIX WACC - Weighted Average Cost of Capital
The WACC of Innovation Pharmaceuticals Inc (IPIX) is 6.0%.
| Range | Selected | |
| Cost of equity | 26.2% - 44.1% | 35.15% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.3% - 6.6% | 6.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 4.85 | 7.01 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 26.2% | 44.1% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 12.57 | 12.57 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.3% | 6.6% |
| Selected WACC | 6.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| IPIX | Innovation Pharmaceuticals Inc | 12.57 | -4.75 | -0.47 |
| AIM | AIM ImmunoTech Inc | 0.34 | 0.85 | 0.68 |
| APM | Aptorum Group Ltd | 0.49 | 1.63 | 1.2 |
| ARMP | Armata Pharmaceuticals Inc | 1.17 | 0.14 | 0.08 |
| AZRX | AzurRx BioPharma Inc | 0.02 | 1.58 | 1.56 |
| BIOC | Biocept Inc | 2.11 | 1.23 | 0.48 |
| EDT.TO | Spectral Medical Inc | 0.06 | 0.59 | 0.56 |
| GALT | Galectin Therapeutics Inc | 0.67 | 1.24 | 0.83 |
| LMNL | Liminal BioSciences Inc | 0.04 | 0.66 | 0.64 |
| OGEN | Oragenics Inc | 0.3 | 1.96 | 1.6 |
| SBM.V | Sirona Biochem Corp | 0.14 | 1.61 | 1.46 |
| Low | High | |
| Unlevered beta | 0.64 | 0.83 |
| Relevered beta | 6.75 | 9.97 |
| Adjusted relevered beta | 4.85 | 7.01 |
IPIX'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 IPIX:
cost_of_equity (35.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (4.85) + 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.