XERS WACC - Weighted Average Cost of Capital
The WACC of Xeris Pharmaceuticals Inc (XERS) is 8.2%.
| Range | Selected | |
| Cost of equity | 5.7% - 9.7% | 7.7% |
| Tax rate | 0.9% - 1.7% | 1.3% |
| Cost of debt | 7.0% - 12.4% | 9.7% |
| WACC | 6.0% - 10.3% | 8.2% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.41 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.7% | 9.7% |
| Tax rate | 0.9% | 1.7% |
| Debt/Equity ratio | 0.31 | 0.31 |
| Cost of debt | 7.0% | 12.4% |
| After-tax WACC | 6.0% | 10.3% |
| Selected WACC | 8.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| XERS | Xeris Pharmaceuticals Inc | 0.31 | 1.16 | 0.89 |
| AGRX | Agile Therapeutics Inc | 0.16 | -0.34 | -0.29 |
| BMY | Bristol-Myers Squibb Co | 0.52 | 0.13 | 0.08 |
| CBAY | Cymabay Therapeutics Inc | 0.03 | 0.93 | 0.91 |
| HEPA | Hepion Pharmaceuticals Inc | 3.39 | 0.37 | 0.09 |
| ITRM | Iterum Therapeutics PLC | 1.18 | 1.56 | 0.72 |
| JNJ | Johnson & Johnson | 0.1 | 0.1 | 0.09 |
| PRTK | Paratek Pharmaceuticals Inc | 2.01 | 1.65 | 0.55 |
| RDHL | Redhill Biopharma Ltd | 0.09 | 1.2 | 1.11 |
| SEEL | Seelos Therapeutics Inc | 142.13 | 1.63 | 0.01 |
| Low | High | |
| Unlevered beta | 0.09 | 0.62 |
| Relevered beta | 0.12 | 0.81 |
| Adjusted relevered beta | 0.41 | 0.87 |
XERS'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 XERS:
cost_of_equity (7.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.41) + 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.