OMER WACC - Weighted Average Cost of Capital
The WACC of Omeros Corp (OMER) is 6.8%.
| Range | Selected | |
| Cost of equity | 11.6% - 15.7% | 13.65% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.2% - 7.5% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.68 | 1.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.6% | 15.7% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 2.16 | 2.16 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.2% | 7.5% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| OMER | Omeros Corp | 2.16 | 0.26 | 0.1 |
| CBAY | Cymabay Therapeutics Inc | 0.03 | 0.93 | 0.92 |
| EOLS | Evolus Inc | 0.2 | 0.98 | 0.85 |
| OCUL | Ocular Therapeutix Inc | 0.04 | 1.57 | 1.52 |
| PHAT | Phathom Pharmaceuticals Inc | 0.89 | 1.98 | 1.2 |
| PRTK | Paratek Pharmaceuticals Inc | 2.01 | 1.65 | 0.67 |
| RDHL | Redhill Biopharma Ltd | 0.09 | 1.2 | 1.13 |
| RVNC | Revance Therapeutics Inc | 1.13 | 1.14 | 0.62 |
| TARS | Tarsus Pharmaceuticals, Inc. | 0.04 | 0.17 | 0.16 |
| XERS | Xeris Pharmaceuticals Inc | 0.31 | 1.16 | 0.94 |
| Low | High | |
| Unlevered beta | 0.78 | 0.93 |
| Relevered beta | 2.01 | 2.39 |
| Adjusted relevered beta | 1.68 | 1.93 |
OMER'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 OMER:
cost_of_equity (13.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.68) + 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.