OVB.L WACC - Weighted Average Cost of Capital
The WACC of Ovoca Bio PLC (OVB.L) is 7.5%.
| Range | Selected | |
| Cost of equity | 8.7% - 13.1% | 10.9% |
| Tax rate | 19.0% - 19.0% | 19% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.4% - 8.6% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.79 | 1.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.7% | 13.1% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.4% | 8.6% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| OVB.L | Ovoca Bio PLC | 0.91 | 0.11 | 0.06 |
| ACPH.BR | Acacia Pharma Group PLC | 0.31 | 1.67 | 1.33 |
| ADVIC.PA | Advicenne SA | 0.26 | 1.25 | 1.03 |
| FCM.MI | Friulchem SpA | 2.72 | 0.15 | 0.05 |
| HYL.BR | Hyloris Pharmaceuticals SA | 0.01 | 1.49 | 1.47 |
| INDEX.ST | InDex Pharmaceuticals Holding AB | 0.01 | -0.92 | -0.91 |
| KDEV.ST | Karolinska Development AB | 0.01 | 0.54 | 0.54 |
| LAVI.AT | Lavipharm SA | 0.26 | 1.08 | 0.9 |
| MOB.ST | Moberg Pharma AB (publ) | 0.01 | 0.5 | 0.49 |
| PRL.MI | Pierrel SpA | 0.28 | 0.18 | 0.15 |
| VISTN.OL | Vistin Pharma ASA | 0.05 | 0.21 | 0.21 |
| Low | High | |
| Unlevered beta | 0.21 | 0.54 |
| Relevered beta | 0.69 | 1.24 |
| Adjusted relevered beta | 0.79 | 1.16 |
OVB.L'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 OVB.L:
cost_of_equity (10.90%) = risk_free_rate (4.25%) + equity_risk_premium (6.50%) * adjusted_beta (0.79) + 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.