TCON WACC - Weighted Average Cost of Capital
The WACC of TRACON Pharmaceuticals Inc (TCON) is 13.6%.
| Range | Selected | |
| Cost of equity | 10.5% - 13.5% | 12% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 12.4% - 29.2% | 20.8% |
| WACC | 9.8% - 17.4% | 13.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.44 | 1.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.5% | 13.5% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 12.4% | 29.2% |
| After-tax WACC | 9.8% | 17.4% |
| Selected WACC | 13.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TCON | TRACON Pharmaceuticals Inc | 0.97 | 3.64 | 2.13 |
| ATNF | 180 Life Sciences Corp | 0.03 | 1.83 | 1.79 |
| ATNM | Actinium Pharmaceuticals Inc | 0 | 1.91 | 1.91 |
| DYAI | Dyadic International Inc | 0.17 | 0.97 | 0.87 |
| MRNA | Moderna Inc | 0 | 1.04 | 1.04 |
| ONC.TO | Oncolytics Biotech Inc | 0.01 | 1.07 | 1.06 |
| PSTI | Pluristem Therapeutics Inc | 0.74 | 1.87 | 1.21 |
| REGN | Regeneron Pharmaceuticals Inc | 0.04 | 0.76 | 0.74 |
| SLNO | Soleno Therapeutics Inc | 0.01 | 0.37 | 0.37 |
| WLLW.TO | Willow Biosciences Inc | 0.38 | 1.31 | 1.02 |
| 950160.KQ | Kolon TissueGene Inc | 0 | 0.83 | 0.83 |
| Low | High | |
| Unlevered beta | 1.02 | 1.06 |
| Relevered beta | 1.66 | 1.82 |
| Adjusted relevered beta | 1.44 | 1.55 |
TCON'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 TCON:
cost_of_equity (12.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.44) + 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.