CVST
Covista Communications Inc
Price:  
USD
Volume:  
1,600
United States | Diversified Telecommunication Services

CVST WACC - Weighted Average Cost of Capital

The WACC of Covista Communications Inc (CVST) is 9.4%.

The Cost of Equity of Covista Communications Inc (CVST) is 32.95%.
The Cost of Debt of Covista Communications Inc (CVST) is 12.5%.

RangeSelected
Cost of equity7.2% - 58.7%32.95%
Tax rate26.2% - 27.0%26.6%
Cost of debt7.0% - 18.0%12.5%
WACC5.2% - 13.6%9.4%
WACC

CVST WACC calculation

CategoryLowHigh
Long-term bond rate3.9%4.4%
Equity market risk premium4.6%5.6%
Adjusted beta0.739.62
Additional risk adjustments0.0%0.5%
Cost of equity7.2%58.7%
Tax rate26.2%27.0%
Debt/Equity ratio
98.6698.66
Cost of debt7.0%18.0%
After-tax WACC5.2%13.6%
Selected WACC9.4%

CVST'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 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.