The WACC of Titan Pharmaceuticals Inc (TTNP) is 8.8%.
Range | Selected | |
Cost of equity | 11.6% - 16.4% | 14% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.6% - 10.0% | 8.8% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 1.67 | 2.06 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 11.6% | 16.4% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.6% | 10.0% |
Selected WACC | 8.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
TTNP | Titan Pharmaceuticals Inc | 0.89 | 0.08 | 0.05 |
BSEM | Biostem Technologies Inc | 0.02 | 1.96 | 1.93 |
CSI.CN | Chemesis International Inc | 0.02 | 1.5 | 1.48 |
GRIN.CN | Grown Rogue International Inc | 0.09 | 1.72 | 1.61 |
HVT.V | Harvest One Cannabis Inc | 0.28 | 1.81 | 1.5 |
MMJ.CN | Matica Enterprises Inc | 0.17 | 1.15 | 1.02 |
MPXI.CN | MPX International Corp | 27.06 | 0 | 0 |
NRTH.V | 48North Cannabis Corp | 0.05 | 1.3 | 1.25 |
OILS.CN | Nextleaf Solutions Ltd | 0.04 | 1.96 | 1.91 |
PVCT | Provectus Biopharmaceuticals Inc | 0.1 | 0.08 | 0.07 |
THC.CN | THC Biomed Intl Ltd | 2.74 | -0.29 | -0.1 |
Low | High | |
Unlevered beta | 1.02 | 1.48 |
Relevered beta | 2 | 2.58 |
Adjusted relevered beta | 1.67 | 2.06 |
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 TTNP:
cost_of_equity (14.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.67) + 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.