NBIX
Neurocrine Biosciences Inc
Price:  
129.11 
USD
Volume:  
387,387.00
United States | Biotechnology
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NBIX WACC - Weighted Average Cost of Capital

The WACC of Neurocrine Biosciences Inc (NBIX) is 7.3%.

The Cost of Equity of Neurocrine Biosciences Inc (NBIX) is 11.65%.
The Cost of Debt of Neurocrine Biosciences Inc (NBIX) is 4.25%.

Range Selected
Cost of equity 10.10% - 13.20% 11.65%
Tax rate 26.60% - 28.60% 27.60%
Cost of debt 4.00% - 4.50% 4.25%
WACC 6.5% - 8.2% 7.3%
WACC

NBIX WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.35 1.48
Additional risk adjustments 0.0% 0.5%
Cost of equity 10.10% 13.20%
Tax rate 26.60% 28.60%
Debt/Equity ratio 1 1
Cost of debt 4.00% 4.50%
After-tax WACC 6.5% 8.2%
Selected WACC 7.3%

NBIX'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 NBIX:

cost_of_equity (11.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.35) + 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.