The WACC of Circuit Research Labs Inc (CRLI) is .
| Range | Selected | |
| Cost of equity | - | |
| Tax rate | - | |
| Cost of debt | - | |
| WACC | - |
| Category | Low | High |
| Long-term bond rate | ||
| Equity market risk premium | ||
| Adjusted beta | ||
| Additional risk adjustments | ||
| Cost of equity | ||
| Tax rate | ||
| Debt/Equity ratio | ||
| Cost of debt | ||
| After-tax WACC | ||
| Selected WACC | ||
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 CRLI:
cost_of_equity () = risk_free_rate () + equity_risk_premium () * adjusted_beta () + risk_adjustments ()
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.