SESN WACC - Weighted Average Cost of Capital
The WACC of Sesen Bio Inc (SESN) is 8.2%.
| Range | Selected | |
| Cost of equity | 10.1% - 15.1% | 12.6% |
| Tax rate | 14.4% - 32.3% | 23.35% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.2% - 9.3% | 8.2% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 1.19 | 1.66 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.1% | 15.1% |
| Tax rate | 14.4% | 32.3% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.2% | 9.3% |
| Selected WACC | 8.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SESN | Sesen Bio Inc | 0.01 | 0.86 | 0.85 |
| ABBV | Abbvie Inc | 0.2 | 0.34 | 0.29 |
| ALDX | Aldeyra Therapeutics Inc | 0.05 | 2.68 | 2.57 |
| BCYC | Bicycle Therapeutics PLC | 0 | 1.7 | 1.69 |
| GERN | Geron Corp | 0.14 | 1.29 | 1.16 |
| INZY | Inozyme Pharma Inc | 0.18 | 5.56 | 4.84 |
| PSTX | Poseida Therapeutics, Inc. | 0.06 | 3.74 | 3.56 |
| REGN | Regeneron Pharmaceuticals Inc | 0.04 | 0.76 | 0.74 |
| SELB | Selecta Biosciences Inc | 0.19 | 0.78 | 0.67 |
| SYRS | Syros Pharmaceuticals Inc | 61.21 | 2.45 | 0.05 |
| 950200.KQ | Psomagen Inc | 0.03 | 0.63 | 0.61 |
| Low | High | |
| Unlevered beta | 0.74 | 1.16 |
| Relevered beta | 1.28 | 1.99 |
| Adjusted relevered beta | 1.19 | 1.66 |
SESN'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 SESN:
cost_of_equity (12.60%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (1.19) + 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.