VINC WACC - Weighted Average Cost of Capital
The WACC of Vincerx Pharma Inc (VINC) is 8.0%.
| Range | Selected | |
| Cost of equity | 10.1% - 14.4% | 12.25% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.9% - 9.0% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.35 | 1.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.1% | 14.4% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.9% | 9.0% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VINC | Vincerx Pharma Inc | 0.82 | -1.79 | -1.12 |
| AGTC | Applied Genetic Technologies Corp | 0.69 | 1.56 | 1.04 |
| AVEO | Aveo Pharmaceuticals Inc | 0.07 | 1 | 0.95 |
| DBTX | Decibel Therapeutics Inc | 0 | 1.71 | 1.71 |
| GRCL | Gracell Biotechnologies Inc | 0.02 | 1.99 | 1.96 |
| GRTX | Galera Therapeutics Inc | 71.37 | 0.66 | 0.01 |
| IBIO | Ibio Inc | 1.12 | 0.78 | 0.43 |
| KZR | Kezar Life Sciences Inc | 0.32 | 0.95 | 0.77 |
| PRQR | ProQR Therapeutics NV | 0.09 | 2.1 | 1.96 |
| SVA.V | Sernova Corp | 0 | 1.42 | 1.42 |
| TRVN | Trevena Inc | 31.3 | 0.8 | 0.03 |
| Low | High | |
| Unlevered beta | 0.77 | 1.04 |
| Relevered beta | 1.52 | 2.06 |
| Adjusted relevered beta | 1.35 | 1.71 |
VINC'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 VINC:
cost_of_equity (12.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.35) + 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.