AGYS
Agilysys Inc
Price:  
105.91 
USD
Volume:  
401,844
United States | Software

Agilysys WACC - Weighted Average Cost of Capital

The WACC of Agilysys Inc (AGYS) is 8.0%.

The Cost of Equity of Agilysys Inc (AGYS) is 8.05%.
The Cost of Debt of Agilysys Inc (AGYS) is 5%.

RangeSelected
Cost of equity7.1% - 9.0%8.05%
Tax rate4.9% - 8.3%6.6%
Cost of debt5.0% - 5.0%5%
WACC7.1% - 9.0%8.0%
WACC

Agilysys WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.70.74
Additional risk adjustments0.0%0.5%
Cost of equity7.1%9.0%
Tax rate4.9%8.3%
Debt/Equity ratio
0.010.01
Cost of debt5.0%5.0%
After-tax WACC7.1%9.0%
Selected WACC8.0%

Agilysys'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 Agilysys:

cost_of_equity (8.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.7) + 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.