For cost of equity, there's two ways to calculate, but for biotech I assume CAPM is the only way. The variables would be (pasted from Wiki):
* expected return for a security * expected risk-free return in that market (government bond yield) * company beta * historical return of the stock market/ equity market
Not sure what other internal variables a company would possess?
However, there are of course non formula driven variables that might impact the decision making:
* financiers simply wont lend money to biotech, even if close to commercialisation * company management might not want to put the company or their jobs at risk by having debt liabilities * company management without share ownership might consider constant equity raises as 'cost free' * market appetite to absorb more equity * the actual fee paid for capital (equity) raisings
