ZIOP WACC - Weighted Average Cost of Capital
The WACC of ZIOPHARM Oncology Inc (ZIOP) is 4.5%.
| Range | Selected | |
| Cost of equity | 4.6% - 5.9% | 5.25% |
| Tax rate | 27.0% - 27.0% | 27% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.1% - 4.8% | 4.5% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.33 | 0.34 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.6% | 5.9% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.1% | 4.8% |
| Selected WACC | 4.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ZIOP | ZIOPHARM Oncology Inc | 0.13 | 1.7 | 1.56 |
| BCEL | Atreca Inc | 1.2 | 4.37 | 2.33 |
| GOSS | Gossamer Bio Inc | 0.72 | 1.75 | 1.14 |
| HSTC | HST Global Inc | 0 | 0.79 | 0.79 |
| NNBP | Nanobac Pharmaceuticals Inc | 16520.38 | 0 | 0 |
| PARD | Poniard Pharmaceuticals Inc | 0.19 | 196.8 | 173.25 |
| PLPL | Plandai Biotechnology Inc | 2040.32 | -161.09 | -0.11 |
| RCKT | Rocket Pharmaceuticals Inc | 0.03 | 1.76 | 1.72 |
| Low | High | |
| Unlevered beta | 1.07 | 1.59 |
| Relevered beta | 0 | 0.01 |
| Adjusted relevered beta | 0.33 | 0.34 |
ZIOP'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 ZIOP:
cost_of_equity (5.25%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.33) + 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.