AOSL
Alpha and Omega Semiconductor Ltd
Price:  
20.91 
USD
Volume:  
374,729.00
United States | Semiconductors & Semiconductor Equipment
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AOSL WACC - Weighted Average Cost of Capital

The WACC of Alpha and Omega Semiconductor Ltd (AOSL) is 10.2%.

The Cost of Equity of Alpha and Omega Semiconductor Ltd (AOSL) is 10.55%.
The Cost of Debt of Alpha and Omega Semiconductor Ltd (AOSL) is 5.50%.

Range Selected
Cost of equity 8.80% - 12.30% 10.55%
Tax rate 7.40% - 16.70% 12.05%
Cost of debt 4.00% - 7.00% 5.50%
WACC 8.5% - 11.9% 10.2%
WACC

AOSL WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.08 1.33
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.80% 12.30%
Tax rate 7.40% 16.70%
Debt/Equity ratio 0.07 0.07
Cost of debt 4.00% 7.00%
After-tax WACC 8.5% 11.9%
Selected WACC 10.2%

AOSL'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 AOSL:

cost_of_equity (10.55%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.08) + 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.