RDUS
Radius Health Inc
Price:  
29.69 
USD
Volume:  
566,525.00
United States | Biotechnology
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RDUS WACC - Weighted Average Cost of Capital

The WACC of Radius Health Inc (RDUS) is 7.6%.

The Cost of Equity of Radius Health Inc (RDUS) is 8.60%.
The Cost of Debt of Radius Health Inc (RDUS) is 6.70%.

Range Selected
Cost of equity 6.90% - 10.30% 8.60%
Tax rate 14.50% - 17.60% 16.05%
Cost of debt 6.40% - 7.00% 6.70%
WACC 6.4% - 8.8% 7.6%
WACC

RDUS WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.66 0.97
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 10.30%
Tax rate 14.50% 17.60%
Debt/Equity ratio 0.5 0.5
Cost of debt 6.40% 7.00%
After-tax WACC 6.4% 8.8%
Selected WACC 7.6%

RDUS'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 RDUS:

cost_of_equity (8.60%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.66) + 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.