CLFD
Clearfield Inc
Price:  
32.80 
USD
Volume:  
106,074.00
United States | Communications Equipment
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CLFD WACC - Weighted Average Cost of Capital

The WACC of Clearfield Inc (CLFD) is 8.1%.

The Cost of Equity of Clearfield Inc (CLFD) is 8.15%.
The Cost of Debt of Clearfield Inc (CLFD) is 7.00%.

Range Selected
Cost of equity 6.50% - 9.80% 8.15%
Tax rate 21.50% - 22.20% 21.85%
Cost of debt 7.00% - 7.00% 7.00%
WACC 6.4% - 9.7% 8.1%
WACC

CLFD WACC calculation

Category Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.56 0.88
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.50% 9.80%
Tax rate 21.50% 22.20%
Debt/Equity ratio 0.01 0.01
Cost of debt 7.00% 7.00%
After-tax WACC 6.4% 9.7%
Selected WACC 8.1%

CLFD'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 CLFD:

cost_of_equity (8.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.56) + 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.