XGN WACC - Weighted Average Cost of Capital
The WACC of Exagen Inc (XGN) is 7.1%.
| Range | Selected | |
| Cost of equity | 5.5% - 8.9% | 7.2% |
| Tax rate | 0.3% - 0.5% | 0.4% |
| Cost of debt | 6.8% - 7.0% | 6.9% |
| WACC | 5.7% - 8.6% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.35 | 0.73 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 8.9% |
| Tax rate | 0.3% | 0.5% |
| Debt/Equity ratio | 0.2 | 0.2 |
| Cost of debt | 6.8% | 7.0% |
| After-tax WACC | 5.7% | 8.6% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| XGN | Exagen Inc | 0.2 | 0.98 | 0.82 |
| CCEL | Cryo-Cell International Inc | 0.21 | -0.16 | -0.13 |
| CCM | Concord Medical Services Holdings Ltd | 12.74 | -0.03 | 0 |
| CTHZ | Cancer Treatment Holdings Inc | 0.37 | 0.33 | 0.24 |
| ENZ | Enzo Biochem Inc | 0.01 | 1.9 | 1.88 |
| FCHS | First Choice Healthcare Solutions Inc | 79.74 | 0.33 | 0 |
| GTMS.TO | Greenbrook TMS Inc | 5.15 | 1.71 | 0.28 |
| IOM.V | Assure Holdings Corp | 0.14 | 1.89 | 1.66 |
| PTQ.V | Protech Home Medical Corp | 0.15 | 1.94 | 1.69 |
| Low | High | |
| Unlevered beta | 0.25 | 0.71 |
| Relevered beta | 0.03 | 0.6 |
| Adjusted relevered beta | 0.35 | 0.73 |
XGN'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 XGN:
cost_of_equity (7.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.35) + 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.