The WACC of Brightcove Inc (BCOV) is 7.0%.
Range | Selected | |
Cost of equity | 7.2% - 11.2% | 9.2% |
Tax rate | 4.3% - 7.8% | 6.05% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.0% - 7.9% | 7.0% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.72 | 1.14 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.2% | 11.2% |
Tax rate | 4.3% | 7.8% |
Debt/Equity ratio | 1 | 1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.0% | 7.9% |
Selected WACC | 7.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
BCOV | Brightcove Inc | 0.93 | 1.48 | 0.78 |
CXDO | Crexendo Inc | 0 | 1.72 | 1.71 |
GTT | GTT Communications Inc | 23.52 | 1.43 | 0.06 |
LIVC | Live Current Media Inc | 74.52 | -0.27 | 0 |
LSYN | Liberated Syndication Inc | 0.05 | 0.76 | 0.72 |
MTLO.V | Martello Technologies Group Inc | 1.42 | 1.3 | 0.55 |
TCX | Tucows Inc | 2.4 | 0.74 | 0.23 |
URL.CN | NameSilo Technologies Corp | 0 | 0.72 | 0.72 |
VNET | 21Vianet Group Inc | 0.9 | 1.65 | 0.89 |
IOM.L | iomart group PLC | 1.73 | 0.63 | 0.24 |
WIIT.MI | Wiit SpA | 0.54 | 0.52 | 0.34 |
Low | High | |
Unlevered beta | 0.34 | 0.72 |
Relevered beta | 0.58 | 1.21 |
Adjusted relevered beta | 0.72 | 1.14 |
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 BCOV:
cost_of_equity (9.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.72) + 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.