The WACC of NeuroScientific Biopharmaceuticals Ltd (NSB.AX) is 6.9%.
Range | Selected | |
Cost of equity | 5.3% - 15.2% | 10.25% |
Tax rate | 30.0% - 30.0% | 30% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 4.4% - 9.3% | 6.9% |
Category | Low | High |
Long-term bond rate | 4.0% | 4.5% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.26 | 1.66 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.3% | 15.2% |
Tax rate | 30.0% | 30.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 4.4% | 9.3% |
Selected WACC | 6.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
NSB.AX | NeuroScientific Biopharmaceuticals Ltd | 1.15 | 0.42 | 0.23 |
ACW.AX | Actinogen Medical Ltd | 0.01 | -0.4 | -0.4 |
ATX.AX | Amplia Therapeutics Ltd | 0 | -0.23 | -0.23 |
BNO.AX | Bionomics Ltd | 0.05 | 1.22 | 1.18 |
EX1.AX | Exopharm Ltd | 0.36 | 1.49 | 1.19 |
IMM.AX | Immutep Ltd | 0 | 1.89 | 1.88 |
IMU.AX | Imugene Ltd | 0.02 | 1.18 | 1.16 |
KZA.AX | Kazia Therapeutics Ltd | 0.1 | -1.19 | -1.12 |
PYC.AX | PYC Therapeutics Ltd | 0 | 1.96 | 1.96 |
SCU.AX | Stemcell United Ltd | 0.19 | -0.63 | -0.55 |
VBS.AX | Vectus Biosystems Ltd | 0.01 | 0.05 | 0.05 |
Low | High | |
Unlevered beta | 0.05 | 1.16 |
Relevered beta | -0.1 | 1.99 |
Adjusted relevered beta | 0.26 | 1.66 |
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 NSB.AX:
cost_of_equity (10.25%) = risk_free_rate (4.25%) + equity_risk_premium (5.60%) * adjusted_beta (0.26) + 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.