LUNG
Pulmonx Corp
Price:  
3.64 
USD
Volume:  
220,292.00
United States | Health Care Equipment & Supplies
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LUNG WACC - Weighted Average Cost of Capital

The WACC of Pulmonx Corp (LUNG) is 7.8%.

The Cost of Equity of Pulmonx Corp (LUNG) is 7.70%.
The Cost of Debt of Pulmonx Corp (LUNG) is 7.95%.

Range Selected
Cost of equity 6.10% - 9.30% 7.70%
Tax rate 0.70% - 0.80% 0.75%
Cost of debt 7.00% - 8.90% 7.95%
WACC 6.3% - 9.2% 7.8%
WACC

LUNG WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.49 0.8
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.10% 9.30%
Tax rate 0.70% 0.80%
Debt/Equity ratio 0.25 0.25
Cost of debt 7.00% 8.90%
After-tax WACC 6.3% 9.2%
Selected WACC 7.8%

LUNG'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 LUNG:

cost_of_equity (7.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.49) + 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.