RCHA WACC - Weighted Average Cost of Capital
The WACC of Rich Pharmaceuticals Inc (RCHA) is 4.1%.
| Range | Selected | |
| Cost of equity | 4.8% - 6.5% | 5.65% |
| Tax rate | 27.0% - 27.0% | 27% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 3.9% - 4.3% | 4.1% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.39 | 0.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.8% | 6.5% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 3.06 | 3.06 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 3.9% | 4.3% |
| Selected WACC | 4.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RCHA | Rich Pharmaceuticals Inc | 3.06 | 1.5 | 0.46 |
| ATRX | Adhera Therapeutics Inc | 11890.58 | -5.89 | 0 |
| AVXT | AVAX Technologies Inc | 55.99 | -70.51 | -1.68 |
| BSYI | Biosyntech Inc | 74265.95 | 0.28 | 0 |
| CGNH | CardioGenics Holdings Inc | 3.78 | -69.88 | -18.59 |
| CRXM | Gene Biotherapeutics Inc | 9078.08 | 26.31 | 0 |
| CYTH | Cyclo Therapeutics Inc | 0.51 | 0.86 | 0.62 |
| IMNPQ | Immune Pharmaceuticals Inc | 27.49 | 1.53 | 0.07 |
| PZRXQ | PZ Wind Down Inc | 0.61 | 0.36 | 0.25 |
| VBIX | Viewbix Inc | 0.1 | -5.78 | -5.39 |
| Low | High | |
| Unlevered beta | 0 | 0.03 |
| Relevered beta | 0.09 | 0.16 |
| Adjusted relevered beta | 0.39 | 0.44 |
RCHA'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 RCHA:
cost_of_equity (5.65%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.39) + 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.