COHU WACC - Weighted Average Cost of Capital
The WACC of Cohu Inc (COHU) is 10.3%.
| Range | Selected | |
| Cost of equity | 8.7% - 12.0% | 10.35% |
| Tax rate | 10.8% - 17.2% | 14% |
| Cost of debt | 7.0% - 8.2% | 7.6% |
| WACC | 8.6% - 11.9% | 10.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.05 | 1.27 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.7% | 12.0% |
| Tax rate | 10.8% | 17.2% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 7.0% | 8.2% |
| After-tax WACC | 8.6% | 11.9% |
| Selected WACC | 10.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| COHU | Cohu Inc | 0.02 | 1.69 | 1.66 |
| ACLS | Axcelis Technologies Inc | 0.02 | 1.67 | 1.64 |
| ACMR | ACM Research Inc | 0.12 | 1.23 | 1.11 |
| ASYS | Amtech Systems Inc | 0.01 | 0.62 | 0.62 |
| CCMP | CMC Materials Inc | 0.18 | 1.11 | 0.96 |
| HYSR | Sunhydrogen Inc | 0 | 0.34 | 0.34 |
| NVMI | Nova Measuring Instruments Ltd | 0.03 | 1.78 | 1.73 |
| PLAB | Photronics Inc | 0.01 | 1.54 | 1.52 |
| TRT | Trio-Tech International | 0.05 | 0.8 | 0.77 |
| VECO | Veeco Instruments Inc | 0.23 | 1.55 | 1.29 |
| Low | High | |
| Unlevered beta | 1.05 | 1.38 |
| Relevered beta | 1.07 | 1.4 |
| Adjusted relevered beta | 1.05 | 1.27 |
COHU'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 COHU:
cost_of_equity (10.35%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.05) + 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.