BOX
Box Inc
Price:  
33.26 
USD
Volume:  
1,312,193
United States | Software

BOX WACC - Weighted Average Cost of Capital

The WACC of Box Inc (BOX) is 7.8%.

The Cost of Equity of Box Inc (BOX) is 8.35%.
The Cost of Debt of Box Inc (BOX) is 5%.

RangeSelected
Cost of equity7.2% - 9.5%8.35%
Tax rate26.2% - 27.0%26.6%
Cost of debt5.0% - 5.0%5%
WACC6.8% - 8.9%7.8%
WACC

BOX WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.720.83
Additional risk adjustments0.0%0.5%
Cost of equity7.2%9.5%
Tax rate26.2%27.0%
Debt/Equity ratio
0.130.13
Cost of debt5.0%5.0%
After-tax WACC6.8%8.9%
Selected WACC7.8%

BOX'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 BOX:

cost_of_equity (8.35%) = 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.