The WACC of Agilysys Inc (AGYS) is 8.0%.
Range | Selected | |
Cost of equity | 7.1% - 9.0% | 8.05% |
Tax rate | 4.9% - 8.3% | 6.6% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.1% - 9.0% | 8.0% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.7 | 0.74 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.1% | 9.0% |
Tax rate | 4.9% | 8.3% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.1% | 9.0% |
Selected WACC | 8.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
AGYS | Agilysys Inc | 0.01 | 0.63 | 0.62 |
BITF.V | Bitfarms Ltd | 0.17 | 0.98 | 0.85 |
ECOM | ChannelAdvisor Corp | 0 | 0.41 | 0.41 |
IDEX | Ideanomics Inc | 406.14 | 0.04 | 0 |
MODN | Model N Inc | 0.24 | 0.72 | 0.59 |
OCFT | OneConnect Financial Technology Co Ltd | 0.02 | 0.91 | 0.89 |
OPRA | Opera Ltd | 0.01 | 1.52 | 1.52 |
RMNI | Rimini Street Inc | 0.31 | 0.67 | 0.52 |
RWWI | Rand Worldwide Inc | 0.01 | 0.57 | 0.56 |
UPLD | Upland Software Inc | 4.72 | 1.98 | 0.37 |
Low | High | |
Unlevered beta | 0.55 | 0.6 |
Relevered beta | 0.55 | 0.61 |
Adjusted relevered beta | 0.7 | 0.74 |
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.