Regeneron WACC - Weighted Average Cost of Capital
The WACC of Regeneron Pharmaceuticals Inc (REGN) is 9.5%.
| Range | Selected | |
| Cost of equity | 8.6% - 10.9% | 9.75% |
| Tax rate | 7.8% - 9.0% | 8.4% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 8.4% - 10.6% | 9.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.03 | 1.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.6% | 10.9% |
| Tax rate | 7.8% | 9.0% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 8.4% | 10.6% |
| Selected WACC | 9.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| REGN | Regeneron Pharmaceuticals Inc | 0.05 | 0.69 | 0.66 |
| ALNY | Alnylam Pharmaceuticals Inc | 0.03 | 1.07 | 1.04 |
| APLS | Apellis Pharmaceuticals Inc | 0.21 | 0.96 | 0.8 |
| BNTX | BioNTech SE | 0.01 | 1.13 | 1.12 |
| BPMC | Blueprint Medicines Corp | 0.06 | 1.35 | 1.28 |
| CVAC | CureVac NV | 0.06 | 1.54 | 1.46 |
| INCY | Incyte Corp | 0 | 0.38 | 0.38 |
| IOVA | Iovance Biotherapeutics Inc | 0 | 1.73 | 1.73 |
| MRNA | Moderna Inc | 0.01 | 1.04 | 1.04 |
| SRPT | Sarepta Therapeutics Inc | 0.32 | 1.23 | 0.95 |
| Low | High | |
| Unlevered beta | 1 | 1.07 |
| Relevered beta | 1.04 | 1.12 |
| Adjusted relevered beta | 1.03 | 1.08 |
Regeneron'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 Regeneron:
cost_of_equity (9.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.03) + 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.