TRVN
Trevena Inc
Price:  
2.50 
USD
Volume:  
275,781.00
United States | Biotechnology
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TRVN WACC - Weighted Average Cost of Capital

The WACC of Trevena Inc (TRVN) is 5.9%.

The Cost of Equity of Trevena Inc (TRVN) is 31.95%.
The Cost of Debt of Trevena Inc (TRVN) is 7.00%.

Range Selected
Cost of equity 26.10% - 37.80% 31.95%
Tax rate 26.20% - 27.00% 26.60%
Cost of debt 7.00% - 7.00% 7.00%
WACC 5.8% - 6.1% 5.9%
WACC

TRVN WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 4.83 5.87
Additional risk adjustments 0.0% 0.5%
Cost of equity 26.10% 37.80%
Tax rate 26.20% 27.00%
Debt/Equity ratio 32.15 32.15
Cost of debt 7.00% 7.00%
After-tax WACC 5.8% 6.1%
Selected WACC 5.9%

TRVN'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 TRVN:

cost_of_equity (31.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (4.83) + 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.