BE WACC - Weighted Average Cost of Capital
The WACC of Bloom Energy Corp (BE) is 7.8%.
| Range | Selected | |
| Cost of equity | 6.4% - 8.3% | 7.35% |
| Tax rate | 0.5% - 0.6% | 0.55% |
| Cost of debt | 5.7% - 12.4% | 9.05% |
| WACC | 6.2% - 9.3% | 7.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.55 | 0.61 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 8.3% |
| Tax rate | 0.5% | 0.6% |
| Debt/Equity ratio | 0.34 | 0.34 |
| Cost of debt | 5.7% | 12.4% |
| After-tax WACC | 6.2% | 9.3% |
| Selected WACC | 7.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BE | Bloom Energy Corp | 0.34 | 1.67 | 1.25 |
| ARRY | Array Technologies Inc | 0.75 | 0.46 | 0.26 |
| AZZ | AZZ Inc | 0.31 | 1.38 | 1.05 |
| BWEN | Broadwind Inc | 0.42 | 0.33 | 0.23 |
| EHT.V | EnerDynamic Hybrid Technologies Corp | 1.92 | 1.02 | 0.35 |
| FCEL | Fuelcell Energy Inc | 1.46 | 0.24 | 0.1 |
| GCHT | Gc China Turbine Corp | 0.6 | 0 | 0 |
| POLA | Polar Power Inc | 1.09 | 1.79 | 0.86 |
| SHLS | Shoals Technologies Group Inc | 0.17 | 0.34 | 0.3 |
| TPIC | TPI Composites Inc | 14.89 | 1.06 | 0.07 |
| Low | High | |
| Unlevered beta | 0.25 | 0.32 |
| Relevered beta | 0.33 | 0.42 |
| Adjusted relevered beta | 0.55 | 0.61 |
BE'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 BE:
cost_of_equity (7.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.55) + 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.