AVGR WACC - Weighted Average Cost of Capital
The WACC of Avinger Inc (AVGR) is 5.5%.
| Range | Selected | |
| Cost of equity | 11.5% - 32.0% | 21.75% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.5% - 6.5% | 5.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.66 | 4.85 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.5% | 32.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 9.11 | 9.11 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.5% | 6.5% |
| Selected WACC | 5.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AVGR | Avinger Inc | 9.11 | 2.58 | 0.34 |
| BDX | Becton Dickinson and Co | 0.42 | 0.16 | 0.12 |
| BIOL | BIOLASE Inc | 46.82 | 0.24 | 0.01 |
| IGAP | Integrity Applications Inc | 0 | -1.66 | -1.66 |
| KRMD | Repro Med Systems Inc | 0 | 1.15 | 1.14 |
| MIR.V | MedMira Inc | 0.24 | 1.4 | 1.19 |
| MLSS | Milestone Scientific Inc | 0 | 0.99 | 0.99 |
| NMTC | Neuroone Medical Technologies Corp | 0.07 | 1.76 | 1.67 |
| OPS.TO | Opsens Inc | 0.03 | 0.83 | 0.81 |
| PDEX | Pro-Dex Inc | 0.08 | -0.08 | -0.07 |
| XAIR | Beyond Air Inc | 0.9 | 0.58 | 0.35 |
| Low | High | |
| Unlevered beta | 0.34 | 0.81 |
| Relevered beta | 1.99 | 6.75 |
| Adjusted relevered beta | 1.66 | 4.85 |
AVGR'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 AVGR:
cost_of_equity (21.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.66) + 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.