The WACC of Akoustis Technologies Inc (AKTS) is 7.4%.
| Range | Selected | |
| Cost of equity | 5.30% - 59.20% | 32.25% |
| Tax rate | -% - 1.20% | 0.60% |
| Cost of debt | 7.00% - 7.00% | 7.00% |
| WACC | 7.0% - 7.9% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | -2.4 | 7.47 |
| Additional risk adjustments | 12.5% | 13.0% |
| Cost of equity | 5.30% | 59.20% |
| Tax rate | -% | 1.20% |
| Debt/Equity ratio | 52.41 | 52.41 |
| Cost of debt | 7.00% | 7.00% |
| After-tax WACC | 7.0% | 7.9% |
| Selected WACC | 7.4% | |
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 Akoustis:
cost_of_equity (32.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-2.4) + risk_adjustments (12.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.