The WACC of MeiraGTx Holdings PLC (MGTX) is 8.3%.
Range | Selected | |
Cost of equity | 6.6% - 11.3% | 8.95% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 7.0% - 7.0% | 7% |
WACC | 6.4% - 10.3% | 8.3% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.59 | 1.15 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.6% | 11.3% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 0.19 | 0.19 |
Cost of debt | 7.0% | 7.0% |
After-tax WACC | 6.4% | 10.3% |
Selected WACC | 8.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
MGTX | MeiraGTx Holdings PLC | 0.19 | 1.55 | 1.36 |
ABBV | Abbvie Inc | 0.21 | 0.39 | 0.34 |
AMGN | Amgen Inc | 0.41 | 0.36 | 0.28 |
AQB | AquaBounty Technologies Inc | 1.08 | 0.43 | 0.24 |
CVM | CEL-SCI Corp | 0.53 | 1.45 | 1.04 |
GILD | Gilead Sciences Inc | 0.21 | 0.33 | 0.29 |
IMAB | I-Mab | 0.06 | 1.43 | 1.37 |
KDMN | Kadmon Holdings Inc | 0 | 1.12 | 1.12 |
OTLK | Outlook Therapeutics Inc | 0.62 | 0.5 | 0.34 |
RCEL | AVITA Medical Inc | 0.25 | 1.93 | 1.63 |
Low | High | |
Unlevered beta | 0.34 | 1.07 |
Relevered beta | 0.39 | 1.22 |
Adjusted relevered beta | 0.59 | 1.15 |
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 MGTX:
cost_of_equity (8.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.59) + 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.