NXTC WACC - Weighted Average Cost of Capital
The WACC of NextCure Inc (NXTC) is 7.5%.
| Range | Selected | |
| Cost of equity | 8.8% - 13.7% | 11.25% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.2% - 8.7% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.06 | 1.58 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 13.7% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.2% | 8.7% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| NXTC | NextCure Inc | 0.89 | 0.34 | 0.21 |
| AGTC | Applied Genetic Technologies Corp | 0.69 | 1.56 | 1.04 |
| DBTX | Decibel Therapeutics Inc | 0 | 1.71 | 1.71 |
| GRTX | Galera Therapeutics Inc | 67.98 | 0.75 | 0.01 |
| IBIO | Ibio Inc | 1.04 | 0.78 | 0.44 |
| KZR | Kezar Life Sciences Inc | 0.31 | 0.93 | 0.76 |
| ONCR | Oncorus Inc | 6.17 | 2.04 | 0.37 |
| PRQR | ProQR Therapeutics NV | 0.08 | 2.09 | 1.97 |
| SVA.V | Sernova Corp | 0 | 1.42 | 1.42 |
| TRVN | Trevena Inc | 37.96 | 0.74 | 0.03 |
| XOMA | XOMA Corp | 0.36 | 1.45 | 1.15 |
| Low | High | |
| Unlevered beta | 0.44 | 1.04 |
| Relevered beta | 1.09 | 1.87 |
| Adjusted relevered beta | 1.06 | 1.58 |
NXTC'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 NXTC:
cost_of_equity (11.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.06) + 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.