The WACC of Boxlight Corp (BOXL) is 14.0%.
| Range | Selected | |
| Cost of equity | 28.70% - 45.60% | 37.15% |
| Tax rate | 4.50% - 5.50% | 5.00% |
| Cost of debt | 7.00% - 17.50% | 12.25% |
| WACC | 8.7% - 19.2% | 14.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 5.4 | 7.27 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 28.70% | 45.60% |
| Tax rate | 4.50% | 5.50% |
| Debt/Equity ratio | 9.7 | 9.7 |
| Cost of debt | 7.00% | 17.50% |
| After-tax WACC | 8.7% | 19.2% |
| Selected WACC | 14.0% | |
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 BOXL:
cost_of_equity (37.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (5.4) + 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.