The WACC of TCR2 Therapeutics Inc (TCRR) is 8.2%.
Range | Selected | |
Cost of equity | 9.2% - 13.6% | 11.4% |
Tax rate | 0.2% - 0.2% | 0.2% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.1% - 9.3% | 8.2% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 1.16 | 1.55 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.2% | 13.6% |
Tax rate | 0.2% | 0.2% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.1% | 9.3% |
Selected WACC | 8.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TCRR | TCR2 Therapeutics Inc | 1.06 | 1.05 | 0.51 |
ADAP | Adaptimmune Therapeutics PLC | 0.76 | 0.2 | 0.11 |
ALGS | Aligos Therapeutics Inc | 0 | 1.47 | 1.46 |
ARDX | Ardelyx Inc | 0.17 | 0.31 | 0.27 |
CLNN | Clene Inc. | 0.47 | 1.25 | 0.85 |
CRTX | Cortexyme Inc | 0 | 0.92 | 0.92 |
EPZM | Epizyme Inc | 0.94 | -0.39 | -0.2 |
EVLO | Evelo Biosciences Inc | 4593.63 | -0.4 | 0 |
GTHX | G1 Therapeutics Inc | 0.14 | 1.04 | 0.91 |
MRNA | Moderna Inc | 0.01 | 0.96 | 0.95 |
VXRT | Vaxart Inc | 0.04 | 2.06 | 1.98 |
Low | High | |
Unlevered beta | 0.51 | 0.91 |
Relevered beta | 1.24 | 1.82 |
Adjusted relevered beta | 1.16 | 1.55 |
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 TCRR:
cost_of_equity (11.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.16) + 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.