LIXT
Lixte Biotechnology Holdings Inc
Price:  
1.26 
USD
Volume:  
2,497.00
United States | Biotechnology
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LIXT WACC - Weighted Average Cost of Capital

The WACC of Lixte Biotechnology Holdings Inc (LIXT) is 7.5%.

The Cost of Equity of Lixte Biotechnology Holdings Inc (LIXT) is 11.30%.
The Cost of Debt of Lixte Biotechnology Holdings Inc (LIXT) is 5.00%.

Range Selected
Cost of equity 8.00% - 14.60% 11.30%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.8% - 9.1% 7.5%
WACC

LIXT WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.89 1.74
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.00% 14.60%
Tax rate 26.20% 27.00%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 5.8% 9.1%
Selected WACC 7.5%

LIXT'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 LIXT:

cost_of_equity (11.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.89) + 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.