The WACC of Ceragon Networks Ltd (CRNT) is 9.9%.
Range | Selected | |
Cost of equity | 8.8% - 11.5% | 10.15% |
Tax rate | 17.1% - 32.0% | 24.55% |
Cost of debt | 4.6% - 18.8% | 11.7% |
WACC | 8.3% - 11.6% | 9.9% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 1.07 | 1.19 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.8% | 11.5% |
Tax rate | 17.1% | 32.0% |
Debt/Equity ratio | 0.12 | 0.12 |
Cost of debt | 4.6% | 18.8% |
After-tax WACC | 8.3% | 11.6% |
Selected WACC | 9.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CRNT | Ceragon Networks Ltd | 0.12 | 1.1 | 1.01 |
AVNW | Aviat Networks Inc | 0.16 | 0.35 | 0.31 |
CAMP | CalAmp Corp | 0.01 | 1.69 | 1.68 |
CASA | Casa Systems Inc | 54.32 | 0.4 | 0.01 |
CLFD | Clearfield Inc | 0.01 | 1.33 | 1.32 |
DGII | Digi International Inc | 0.1 | 1.31 | 1.22 |
ET.TO | Evertz Technologies Ltd | 0.03 | 0.84 | 0.82 |
EXF.TO | EXFO Inc | 0.14 | 1.47 | 1.32 |
HLIT | Harmonic Inc | 0.12 | 1.1 | 1.01 |
STC.V | Sangoma Technologies Corp | 0.18 | 1.3 | 1.13 |
Low | High | |
Unlevered beta | 1.01 | 1.17 |
Relevered beta | 1.1 | 1.28 |
Adjusted relevered beta | 1.07 | 1.19 |
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 CRNT:
cost_of_equity (10.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.07) + 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.