RARE
Ultragenyx Pharmaceutical Inc
Price:  
39.91 
USD
Volume:  
685,292
United States | Biotechnology

RARE WACC - Weighted Average Cost of Capital

The WACC of Ultragenyx Pharmaceutical Inc (RARE) is 7.4%.

The Cost of Equity of Ultragenyx Pharmaceutical Inc (RARE) is 9.9%.
The Cost of Debt of Ultragenyx Pharmaceutical Inc (RARE) is 5%.

RangeSelected
Cost of equity7.9% - 11.9%9.9%
Tax rate0.3% - 0.4%0.35%
Cost of debt5.0% - 5.0%5%
WACC6.5% - 8.4%7.4%
WACC

RARE WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.891.25
Additional risk adjustments0.0%0.5%
Cost of equity7.9%11.9%
Tax rate0.3%0.4%
Debt/Equity ratio
11
Cost of debt5.0%5.0%
After-tax WACC6.5%8.4%
Selected WACC7.4%

RARE'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 RARE:

cost_of_equity (9.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.89) + 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.