CSVI WACC - Weighted Average Cost of Capital
The WACC of Computer Services Inc (CSVI) is 6.9%.
| Range | Selected | |
| Cost of equity | 8.8% - 12.2% | 10.5% |
| Tax rate | 22.1% - 23.0% | 22.55% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.9% - 7.8% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.32 | 1.53 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 12.2% |
| Tax rate | 22.1% | 23.0% |
| Debt/Equity ratio | 1 | 1 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.9% | 7.8% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CSVI | Computer Services Inc | 0.9 | 0.21 | 0.12 |
| APCX | Apptech Corp | 0.01 | 0.18 | 0.18 |
| DIGI | Digitiliti Inc | 387.72 | -100.42 | -0.33 |
| EVOP | EVO Payments Inc | 0.39 | 1.11 | 0.85 |
| EVTC | Evertec Inc | 0.39 | 0.68 | 0.52 |
| EXLS | Exlservice Holdings Inc | 0.04 | 0.82 | 0.79 |
| IIIV | I3 Verticals Inc | 0.03 | 0.47 | 0.46 |
| PAGS | PagSeguro Digital Ltd | 0.28 | 0.88 | 0.73 |
| PAYX | Paychex Inc | 0.01 | 0.51 | 0.5 |
| STCN | Steel Connect Inc | 0.17 | 0.06 | 0.05 |
| VQS.TO | Viq Solutions Inc | 2.41 | 1.4 | 0.49 |
| Low | High | |
| Unlevered beta | 0.46 | 0.5 |
| Relevered beta | 1.48 | 1.79 |
| Adjusted relevered beta | 1.32 | 1.53 |
CSVI'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 CSVI:
cost_of_equity (10.50%) = risk_free_rate (3.45%) + equity_risk_premium (4.70%) * adjusted_beta (1.32) + 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.