ZSAN WACC - Weighted Average Cost of Capital
The WACC of Zosano Pharma Corp (ZSAN) is 7.3%.
| Range | Selected | |
| Cost of equity | 5.1% - 13.0% | 9.05% |
| Tax rate | 27.0% - 27.0% | 27% |
| Cost of debt | 7.0% - 10.0% | 8.5% |
| WACC | 5.1% - 9.4% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.47 | 1.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 13.0% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 1.75 | 1.75 |
| Cost of debt | 7.0% | 10.0% |
| After-tax WACC | 5.1% | 9.4% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ZSAN | Zosano Pharma Corp | 1.75 | 3.34 | 1.47 |
| CMXC | Cell MedX Corp | 0.52 | -5.11 | -3.7 |
| CVM.V | CVR Medical Corp | 0.32 | -0.53 | -0.43 |
| IDXX | IDEXX Laboratories Inc | 0.02 | 0.73 | 0.72 |
| LXG.V | Lexagene Holdings Inc | 0.11 | 2.1 | 1.95 |
| MIR.V | MedMira Inc | 0.27 | 1.31 | 1.09 |
| NDRA | ENDRA Life Sciences Inc | 0.81 | 0.64 | 0.4 |
| NMRD | Nemaura Medical Inc | 4964.06 | -359.55 | -0.1 |
| SQD.V | SQI Diagnostics Inc | 2.62 | 0.71 | 0.24 |
| XAIR | Beyond Air Inc | 0.66 | 0.03 | 0.02 |
| SCP.WA | Scope Fluidics SA | 0 | 0.07 | 0.07 |
| Low | High | |
| Unlevered beta | 0.07 | 0.4 |
| Relevered beta | 0.21 | 2.03 |
| Adjusted relevered beta | 0.47 | 1.69 |
ZSAN'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 ZSAN:
cost_of_equity (9.05%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (0.47) + 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.