ORX.ST WACC - Weighted Average Cost of Capital
The WACC of Orexo AB (ORX.ST) is 6.6%.
| Range | Selected | |
| Cost of equity | 5.4% - 7.2% | 6.3% |
| Tax rate | 5.6% - 7.3% | 6.45% |
| Cost of debt | 7.0% - 7.9% | 7.45% |
| WACC | 5.9% - 7.3% | 6.6% |
| Category | Low | High |
| Long-term bond rate | 2.5% | 3.0% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.38 | 0.45 |
| Additional risk adjustments | 1.0% | 1.5% |
| Cost of equity | 5.4% | 7.2% |
| Tax rate | 5.6% | 7.3% |
| Debt/Equity ratio | 0.68 | 0.68 |
| Cost of debt | 7.0% | 7.9% |
| After-tax WACC | 5.9% | 7.3% |
| Selected WACC | 6.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ORX.ST | Orexo AB | 0.68 | 0.08 | 0.05 |
| AGY.L | Allergy Therapeutics PLC | 0.09 | 0.32 | 0.3 |
| AMYT.L | Amryt Pharma Holdings Ltd | 0.34 | 0.05 | 0.04 |
| EAH.L | ECO Animal Health Group PLC | 0.1 | 0.75 | 0.69 |
| FCM.MI | Friulchem SpA | 2.72 | 0.15 | 0.04 |
| INDEX.ST | InDex Pharmaceuticals Holding AB | 0.01 | -0.92 | -0.91 |
| LAVI.AT | Lavipharm SA | 0.25 | 1.14 | 0.92 |
| MARI.VI | Marinomed Biotech AG | 0.64 | 0.13 | 0.08 |
| SHE.MI | Shedir Pharma Srl Unipersonale | 0.15 | -0.16 | -0.14 |
| VISTN.OL | Vistin Pharma ASA | 0.05 | 0.15 | 0.15 |
| Low | High | |
| Unlevered beta | 0.05 | 0.11 |
| Relevered beta | 0.07 | 0.18 |
| Adjusted relevered beta | 0.38 | 0.45 |
ORX.ST'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 ORX.ST:
cost_of_equity (6.30%) = risk_free_rate (2.75%) + equity_risk_premium (5.60%) * adjusted_beta (0.38) + risk_adjustments (1.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.