The WACC of Covista Communications Inc (CVST) is 9.4%.
Range | Selected | |
Cost of equity | 7.2% - 58.7% | 32.95% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 7.0% - 18.0% | 12.5% |
WACC | 5.2% - 13.6% | 9.4% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.73 | 9.62 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.2% | 58.7% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 98.66 | 98.66 |
Cost of debt | 7.0% | 18.0% |
After-tax WACC | 5.2% | 13.6% |
Selected WACC | 9.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CVST | Covista Communications Inc | 98.66 | 0 | 0 |
ADYA.V | Adya Inc | 0.58 | -1.95 | -1.37 |
ALSK | Alaska Communications Systems Group Inc | 0.91 | 1.48 | 0.89 |
NTLK | Net Talk.com Inc | 25258.92 | 0 | 0 |
NUVR | Nuvera Communications Inc | 2.46 | 0.04 | 0.01 |
SGRB | SigmaBroadband Co | 1.49 | -0.75 | -0.36 |
TGO.TO | Terago Inc | 1.77 | 0.46 | 0.2 |
UPCO.CN | Upco International Inc | 0.05 | 1.17 | 1.13 |
VZ | Verizon Communications Inc | 0.81 | 0.29 | 0.18 |
ADT.L | Adept Technology Group PLC | 0.81 | 1.5 | 0.94 |
Low | High | |
Unlevered beta | 0.01 | 0.19 |
Relevered beta | 0.6 | 13.87 |
Adjusted relevered beta | 0.73 | 9.62 |
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 CVST:
cost_of_equity (32.95%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.73) + 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.