The WACC of Regeneron Pharmaceuticals Inc (REGN) is 9.5%.
Range | Selected | |
Cost of equity | 8.4% - 11.0% | 9.7% |
Tax rate | 7.8% - 9.0% | 8.4% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 8.2% - 10.7% | 9.5% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.99 | 1.1 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.4% | 11.0% |
Tax rate | 7.8% | 9.0% |
Debt/Equity ratio | 0.05 | 0.05 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 8.2% | 10.7% |
Selected WACC | 9.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
REGN | Regeneron Pharmaceuticals Inc | 0.05 | 0.74 | 0.71 |
ALNY | Alnylam Pharmaceuticals Inc | 0.02 | 1.21 | 1.18 |
APLS | Apellis Pharmaceuticals Inc | 0.19 | 0.99 | 0.84 |
ASND | Ascendis Pharma A/S | 0.1 | 0.86 | 0.79 |
BNTX | BioNTech SE | 0.01 | 1.07 | 1.05 |
BPMC | Blueprint Medicines Corp | 0.05 | 1.36 | 1.3 |
CVAC | CureVac NV | 0.04 | 1.4 | 1.36 |
INCY | Incyte Corp | 0 | 0.43 | 0.42 |
IOVA | Iovance Biotherapeutics Inc | 0 | 1.54 | 1.54 |
MRNA | Moderna Inc | 0.01 | 1.01 | 1.01 |
Low | High | |
Unlevered beta | 0.94 | 1.1 |
Relevered beta | 0.99 | 1.15 |
Adjusted relevered beta | 0.99 | 1.1 |
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 (9.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.99) + 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.