CMTL WACC - Weighted Average Cost of Capital

The WACC of Comtech Telecommunications Corp (CMTL) is 9.9%.

The Cost of Equity of Comtech Telecommunications Corp (CMTL) is 14.50%.

The Cost of Debt of Comtech Telecommunications Corp (CMTL) is 8.25%.

	Range	Selected
Cost of equity	11.50% - 17.50%	14.50%
Tax rate	1.30% - 5.50%	3.40%
Cost of debt	7.00% - 9.50%	8.25%
WACC	8.3% - 11.5%	9.9%

WACC

CMTL WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	4.6%	5.6%
Adjusted beta	1.66	2.26

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	17.50%

Tax rate	1.30%	5.50%
Debt/Equity ratio	2.38	2.38
Cost of debt	7.00%	9.50%

After-tax WACC	8.3%	11.5%


Selected WACC	9.9%

CMTL'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 CMTL:

cost_of_equity (14.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.66) + 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.