SCPH WACC - Weighted Average Cost of Capital
The WACC of scPharmaceuticals Inc (SCPH) is 7.7%.
| Range | Selected | |
| Cost of equity | 5.7% - 9.6% | 7.65% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 7.0% - 14.3% | 10.65% |
| WACC | 5.6% - 9.8% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.41 | 0.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 9.6% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.25 | 0.25 |
| Cost of debt | 7.0% | 14.3% |
| After-tax WACC | 5.6% | 9.8% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SCPH | scPharmaceuticals Inc | 0.25 | 1.74 | 1.47 |
| ACRX | AcelRx Pharmaceuticals Inc | 0.4 | 1.74 | 1.35 |
| BMY | Bristol-Myers Squibb Co | 0.53 | 0.15 | 0.1 |
| EBM.V | Eastwood Bio-Medical Canada Inc | 0 | -1.45 | -1.44 |
| ETON | Eton Pharmaceuticals Inc | 0.08 | 1.11 | 1.05 |
| JNJ | Johnson & Johnson | 0.1 | 0.09 | 0.08 |
| PCLO.V | Pharmacielo Ltd | 1.62 | -2.03 | -0.93 |
| ROMJ.V | Rubicon Organics Inc | 0.35 | -1.16 | -0.92 |
| SCYX | SCYNEXIS Inc | 0.51 | 1.21 | 0.89 |
| XLY.V | Auxly Cannabis Group Inc | 0.58 | 0.72 | 0.51 |
| Low | High | |
| Unlevered beta | 0.1 | 0.66 |
| Relevered beta | 0.12 | 0.78 |
| Adjusted relevered beta | 0.41 | 0.85 |
SCPH'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 SCPH:
cost_of_equity (7.65%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.41) + 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.