PSTI
Pluristem Therapeutics Inc
Price:  
1.00 
USD
Volume:  
170,627.00
Israel | Biotechnology
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PSTI WACC - Weighted Average Cost of Capital

The WACC of Pluristem Therapeutics Inc (PSTI) is 8.4%.

The Cost of Equity of Pluristem Therapeutics Inc (PSTI) is 11.95%.
The Cost of Debt of Pluristem Therapeutics Inc (PSTI) is 5.00%.

Range Selected
Cost of equity 9.80% - 14.10% 11.95%
Tax rate 27.00% - 27.00% 27.00%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.2% - 9.7% 8.4%
WACC

PSTI WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 1.57 1.89
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.80% 14.10%
Tax rate 27.00% 27.00%
Debt/Equity ratio 0.74 0.74
Cost of debt 5.00% 5.00%
After-tax WACC 7.2% 9.7%
Selected WACC 8.4%

PSTI'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 PSTI:

cost_of_equity (11.95%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.57) + 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.