OTLK
Outlook Therapeutics Inc
Price:  
1.80 
USD
Volume:  
1,363,904.00
United States | Biotechnology
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OTLK WACC - Weighted Average Cost of Capital

The WACC of Outlook Therapeutics Inc (OTLK) is 8.2%.

The Cost of Equity of Outlook Therapeutics Inc (OTLK) is 10.45%.
The Cost of Debt of Outlook Therapeutics Inc (OTLK) is 5.00%.

Range Selected
Cost of equity 7.70% - 13.20% 10.45%
Tax rate -% - 3.40% 1.70%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.6% - 9.8% 8.2%
WACC

OTLK WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.84 1.49
Additional risk adjustments 0.0% 0.5%
Cost of equity 7.70% 13.20%
Tax rate -% 3.40%
Debt/Equity ratio 0.68 0.68
Cost of debt 5.00% 5.00%
After-tax WACC 6.6% 9.8%
Selected WACC 8.2%

OTLK'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 OTLK:

cost_of_equity (10.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.84) + 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.