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PASG (Passage Bio) WACC % :6.42% (As of Mar. 14, 2025)


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What is Passage Bio WACC %?

As of today (2025-03-14), Passage Bio's weighted average cost of capital is 6.42%%. Passage Bio's ROIC % is -166.68% (calculated using TTM income statement data). Passage Bio earns returns that do not match up to its cost of capital. It will destroy value as it grows.

For a comprehensive WACC calculation, please access the WACC Calculator.


Passage Bio WACC % Historical Data

The historical data trend for Passage Bio's WACC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Passage Bio WACC % Chart

Passage Bio Annual Data
Trend Dec18 Dec19 Dec20 Dec21 Dec22 Dec23 Dec24
WACC %
Get a 7-Day Free Trial 6.93 7.52 7.25 6.30 8.32

Passage Bio Quarterly Data
Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24 Dec24
WACC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.30 8.55 6.56 5.73 8.32

Competitive Comparison of Passage Bio's WACC %

For the Biotechnology subindustry, Passage Bio's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Passage Bio's WACC % Distribution in the Biotechnology Industry

For the Biotechnology industry and Healthcare sector, Passage Bio's WACC % distribution charts can be found below:

* The bar in red indicates where Passage Bio's WACC % falls into.



Passage Bio WACC % Calculation

The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.

WACC=E/(E + D)*Cost of Equity+D/(E + D)*Cost of Debt*(1 - Tax Rate)

1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Passage Bio's market capitalization (E) is $24.051 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Dec. 2024, Passage Bio's latest one-year quarterly average Book Value of Debt (D) is $26.0434 Mil.
a) weight of equity = E / (E + D) = 24.051 / (24.051 + 26.0434) = 0.4801
b) weight of debt = D / (E + D) = 26.0434 / (24.051 + 26.0434) = 0.5199

2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.32%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Passage Bio's beta is 1.51.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.32% + 1.51 * 6% = 13.38%

3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Dec. 2024, Passage Bio's interest expense (positive number) was $-0 Mil. Its total Book Value of Debt (D) is $26.0434 Mil.
Cost of Debt = -0 / 26.0434 = 0%.

4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 0 / -64.767 = 0%.

Passage Bio's Weighted Average Cost Of Capital (WACC) for Today is calculated as:

WACC=E / (E + D)*Cost of Equity+D / (E + D)*Cost of Debt*(1 - Tax Rate)
=0.4801*13.38%+0.5199*0%*(1 - 0%)
=6.42%

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Passage Bio  (NAS:PASG) WACC % Explanation

Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Passage Bio's weighted average cost of capital is 6.42%%. Passage Bio's ROIC % is -166.68% (calculated using TTM income statement data). Passage Bio earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.

2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.

3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.

4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.


Related Terms

Passage Bio Business Description

Traded in Other Exchanges
N/A
Address
2005 Market Street, 39th Floor, One Commerce Square, Philadelphia, PA, USA, 19103
Passage Bio Inc is a genetic medicines company. The company is focused on developing transformative therapies for rare, monogenic CNS disorders. It has pipeline products such as GM1 Gangliosidosis, Frontotemporal dementia, and Krabbe Disease.
Executives
Kathleen Borthwick officer: SVP, Interim CFO C/O PASSAGE BIO, INC., 2005 MARKET STREET, 39TH FLOOR, PHILADELPHIA PA 19103
Orbimed Advisors Llc 10 percent owner 601 LEXINGTON AVENUE, 54TH FLOOR, NEW YORK NY 10022
Mark S Forman officer: Chief Medical Officer C/O PASSAGE BIO, INC., 2005 MARKET STREET, 39TH FLOOR, PHILADELPHIA PA 19103
Simona King officer: Chief Financial Officer C/O PASSAGE BIO, INC., 2005 MARKET STREET, 39TH FLOOR, PHILADELPHIA PA 19103
Dolan Sondhi director C/O PASSAGE BIO, INC., 2005 MARKET STREET, 39TH FLOOR, PHILADELPHIA PA 19103
Alexandros Fotopoulos officer: Chief Technical Officer TWO COMMERCE SQUARE, 2001 MARKET STREET, 28TH FLOOR, PHILADELPHIA PA 19103
Sandip Kapadia director 450 WEST 15 STREET, SUITE 505, NEW YORK NY 10011
William Chou director, officer: Chief Executive Officer C/O PASSAGE BIO, INC., 2005 MARKET STREET, 39TH FLOOR, PHILADELPHIA PA 19103
Monika Maria Toernsen officer: Chief Commercial Officer ONE COMMERCE SQUARE, 2005 MARKET STREET, 39TH FLOOR, PHILADELPHIA PA 19103
Michael E. Kamarck director C/O UNILIFE CORPORATION, 250 CROSS FARM LANE, YORK PA 17406
Bruce A Goldsmith director, officer: CEO and President C/O PASSAGE BIO, INC., TWO COMMERCE SQ, 2001 MARKET ST, 28TH FL, PHILADELPHIA PA 19103
Orbimed Capital Gp Vii Llc 10 percent owner 601 LEXINGTON AVENUE, 54TH FLOOR, NEW YORK NY 10022
Brian Burkavage officer: Controller C/O PASSAGE BIO, INC., ONE COMMERCE SQUARE, 39TH FLOOR, PHILADELPHIA PA 19103
Derrell Porter director C/O ATARA BIOTHERAPEUTICS, INC., 611 GATEWAY BLVD. #900, SOUTH SAN FRANCISCO CA 94080
Richard Steven Morris officer: Chief Financial Officer 397 EAGLEVIEW BOULEVARD, EXTON PA 19341