MRNA WACC - Weighted Average Cost of Capital
The WACC of Moderna Inc (MRNA) is 8.5%.
| Range | Selected | |
| Cost of equity | 7.3% - 9.8% | 8.55% |
| Tax rate | 5.4% - 10.0% | 7.7% |
| Cost of debt | 5.4% - 7.0% | 6.2% |
| WACC | 7.3% - 9.8% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.74 | 0.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.3% | 9.8% |
| Tax rate | 5.4% | 10.0% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.4% | 7.0% |
| After-tax WACC | 7.3% | 9.8% |
| Selected WACC | 8.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| MRNA | Moderna Inc | 0.01 | 1.04 | 1.04 |
| ALNY | Alnylam Pharmaceuticals Inc | 0.03 | 1.07 | 1.04 |
| ARNA | Arena Pharmaceuticals Inc | 0.01 | 0.53 | 0.52 |
| BNTX | BioNTech SE | 0.01 | 1.13 | 1.12 |
| CVAC | CureVac NV | 0.06 | 1.54 | 1.46 |
| INCY | Incyte Corp | 0 | 0.38 | 0.38 |
| IONS | Ionis Pharmaceuticals Inc | 0.24 | 0.72 | 0.59 |
| LEGN | Legend Biotech Corp | 0.06 | 0.65 | 0.62 |
| REGN | Regeneron Pharmaceuticals Inc | 0.05 | 0.69 | 0.66 |
| UTHR | United Therapeutics Corp | 0.02 | 0.61 | 0.6 |
| Low | High | |
| Unlevered beta | 0.61 | 0.81 |
| Relevered beta | 0.61 | 0.82 |
| Adjusted relevered beta | 0.74 | 0.88 |
MRNA'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 MRNA:
cost_of_equity (8.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.74) + 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.