The WACC of Plus Therapeutics Inc (PSTV) is 6.3%.
Range | Selected | |
Cost of equity | 5.5% - 7.9% | 6.7% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 5.1% - 7.4% | 6.3% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.36 | 0.54 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.5% | 7.9% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 0.19 | 0.19 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 5.1% | 7.4% |
Selected WACC | 6.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
PSTV | Plus Therapeutics Inc | 0.19 | 1.22 | 1.07 |
ABBV | Abbvie Inc | 0.2 | 0.31 | 0.27 |
AMGN | Amgen Inc | 0.37 | 0.35 | 0.28 |
BCT.V | Briacell Therapeutics Corp | 0 | 1.43 | 1.43 |
BIXT | Bioxytran Inc | 0.21 | -1.66 | -1.43 |
BTI.V | biOasis Technologies Inc | 4.79 | 0 | 0 |
HEM.V | Hemostemix Inc | 0.24 | -0.29 | -0.25 |
KNE.V | Kane Biotech Inc | 0.26 | -0.18 | -0.15 |
TELO.V | Telo Genomics Corp | 0 | 0.33 | 0.33 |
950220.KQ | Neoimmunetech Inc (Pre-reincorporation) | 0.01 | 0.06 | 0.06 |
Low | High | |
Unlevered beta | 0.03 | 0.27 |
Relevered beta | 0.04 | 0.31 |
Adjusted relevered beta | 0.36 | 0.54 |
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 PSTV:
cost_of_equity (6.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + 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.