BRZE WACC - Weighted Average Cost of Capital
The WACC of Braze Inc (BRZE) is 9.4%.
| Range | Selected | |
| Cost of equity | 11.6% - 16.1% | 13.85% |
| Tax rate | 1.1% - 1.6% | 1.35% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.3% - 10.5% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.69 | 2 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.6% | 16.1% |
| Tax rate | 1.1% | 1.6% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.3% | 10.5% |
| Selected WACC | 9.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BRZE | Braze Inc | 0.84 | 1.36 | 0.74 |
| ADBE | Adobe Inc | 0.04 | 0.94 | 0.91 |
| ADSK | Autodesk Inc | 0.04 | 0.99 | 0.96 |
| CDNS | Cadence Design Systems Inc | 0.03 | 1.4 | 1.36 |
| CRM | Salesforce.Com Inc | 0.04 | 1.28 | 1.23 |
| DDOG | Datadog Inc | 0.03 | 1.54 | 1.49 |
| INTU | Intuit Inc | 0.03 | 0.6 | 0.59 |
| SNPS | Synopsys Inc | 0 | 1.55 | 1.55 |
| WDAY | Workday Inc | 0.05 | 1.08 | 1.04 |
| Low | High | |
| Unlevered beta | 0.97 | 1.19 |
| Relevered beta | 2.03 | 2.49 |
| Adjusted relevered beta | 1.69 | 2 |
BRZE'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 BRZE:
cost_of_equity (13.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.69) + 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.