ASTS WACC - Weighted Average Cost of Capital
The WACC of Ast Spacemobile Inc (ASTS) is 7.3%.
| Range | Selected | |
| Cost of equity | 6.3% - 8.3% | 7.3% |
| Tax rate | 0.5% - 0.6% | 0.55% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 6.3% - 8.3% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.54 | 0.61 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.3% | 8.3% |
| Tax rate | 0.5% | 0.6% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 6.3% | 8.3% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ASTS | Ast Spacemobile Inc | 0.01 | 1.6 | 1.58 |
| BAND | Bandwidth Inc | 0.6 | 1.33 | 0.83 |
| CCOI | Cogent Communications Holdings Inc | 0.81 | 0.58 | 0.32 |
| CRGE | Charge Enterprises Inc | 6.51 | 2.05 | 0.27 |
| GSAT | Globalstar Inc | 0.15 | 1.62 | 1.41 |
| IRDM | Iridium Communications Inc | 0.53 | 0.67 | 0.44 |
| LILA | Liberty Latin America Ltd | 6.56 | 0.77 | 0.1 |
| LUMN | Lumen Technologies Inc | 3.91 | 0.78 | 0.16 |
| SATS | EchoStar Corp | 3 | 1.2 | 0.3 |
| Low | High | |
| Unlevered beta | 0.31 | 0.42 |
| Relevered beta | 0.31 | 0.42 |
| Adjusted relevered beta | 0.54 | 0.61 |
ASTS'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 ASTS:
cost_of_equity (7.30%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.54) + 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.