VBLT WACC - Weighted Average Cost of Capital
The WACC of Vascular Biogenics Ltd (VBLT) is 7.0%.
| Range | Selected | |
| Cost of equity | 8.7% - 12.1% | 10.4% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.2% - 7.9% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 4.2% | 4.7% |
| Equity market risk premium | 5.0% | 6.0% |
| Adjusted beta | 0.9 | 1.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.7% | 12.1% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.2% | 7.9% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VBLT | Vascular Biogenics Ltd | 1.02 | 1.47 | 0.84 |
| EVGN.TA | Evogene Ltd | 0.01 | 0.31 | 0.31 |
| KMDA.TA | Kamada Ltd | 0.02 | 0.5 | 0.5 |
| GMDA | Gamida Cell Ltd | 17.12 | 0.77 | 0.06 |
| KMDA | Kamada Ltd | 0.02 | 0.77 | 0.76 |
| PSTI | Pluristem Therapeutics Inc | 0.74 | 1.87 | 1.21 |
| URGN | Urogen Pharma Ltd | 0.2 | 0.65 | 0.57 |
| Low | High | |
| Unlevered beta | 0.52 | 0.68 |
| Relevered beta | 0.85 | 1.24 |
| Adjusted relevered beta | 0.9 | 1.16 |
VBLT'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 VBLT:
cost_of_equity (10.40%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (0.9) + 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.