KZR
Kezar Life Sciences Inc
Price:  
4.58 
USD
Volume:  
52,977.00
United States | Biotechnology
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KZR WACC - Weighted Average Cost of Capital

The WACC of Kezar Life Sciences Inc (KZR) is 8.1%.

The Cost of Equity of Kezar Life Sciences Inc (KZR) is 9.50%.
The Cost of Debt of Kezar Life Sciences Inc (KZR) is 5.00%.

Range Selected
Cost of equity 7.80% - 11.20% 9.50%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.8% - 9.4% 8.1%
WACC

KZR WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.85 1.14
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.80% 11.20%
Tax rate 26.20% 27.00%
Debt/Equity ratio 0.32 0.32
Cost of debt 5.00% 5.00%
After-tax WACC 6.8% 9.4%
Selected WACC 8.1%

KZR'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 KZR:

cost_of_equity (9.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.85) + 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.