The WACC of Boxlight Corp (BOXL) is 13.5%.
| Range | Selected | |
| Cost of equity | 100.00% - 158.30% | 129.15% |
| Tax rate | 4.90% - 5.50% | 5.20% |
| Cost of debt | 7.00% - 14.60% | 10.80% |
| WACC | 9.2% - 17.8% | 13.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 20.9 | 27.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 100.00% | 158.30% |
| Tax rate | 4.90% | 5.50% |
| Debt/Equity ratio | 35.55 | 35.55 |
| Cost of debt | 7.00% | 14.60% |
| After-tax WACC | 9.2% | 17.8% |
| Selected WACC | 13.5% | |
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 (129.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (20.9) + 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.